‘Record-high number’ of people in Canada don’t think they’ll ever afford a home: survey
As home prices and interest rates remain elevated, a record number of non-homeowners think they’ll never afford a house, according to a new survey.
A report released by Mortgage Professionals Canada on Tuesday found about a third of respondents believe they’ll never be able to afford their first house.
“The rapid decline in affordability—thanks to both high home prices and now high interest rates—has played a central role in Canadians’ view towards homebuying,” the report said.
“The survey revealed a record-high number of non-owners believe they will never be able to buy a family home, at 33 percent, growing by 8 points in just six months and a whopping 15 points year-over-year.”
The survey also found Canadians are more anxious about inflation, with 60 per cent of respondents saying they’re worried about how it will impact their finances, up 20 per cent from six months earlier.
Last month, Statistics Canada reported inflation eased in January, with the consumer price index climbing 5.9 per cent from a year ago. However, inflation still remains significantly higher than the Bank of Canada’s inflation-control target range of one to three per cent.
The Bank of Canada is set to make its latest key policy rate announcement this Wednesday.
While economists tracked by Bloomberg are anticipating the central bank will hold its key policy rate at 4.50 per cent, consumers are concerned about how future rate hikes could impact their ability to pay for their mortgage.
The report found almost half of respondents (47 per cent) say a rate increase of up to 20 per cent “would cause them to experience mortgage payment difficulties.”
Many new homeowners are also having a hard time paying their mortgages, with 14 per cent of first-time buyers saying it’s hard to meet payments every month.
While many housing markets have seen prices drop over the past 12 months, the report said, “Higher mortgage costs resulted in a broad deterioration of affordability across Canada.”
“Urban centres in Ontario and British Columbia, where average house prices are 23.5 and 23.3-times average disposable income, remain by far the least affordable. This ratio is much lower in Quebec (13.3 times),” it said.
Vancouver and Toronto will continue to be the least affordable housing markets, according to the report, and they’re “not expected to return to affordable levels in the foreseeable future.”
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