What is the income gap between the salary required to purchase an average home and actual household incomes across major Ontario cities?
Using August 2018 average home prices from the Toronto Real Estate Board and other local Ontario real estate boards, and assuming a 20% down payment, Zoocasa calculated the minimum household income required to buy an average home in each region.
Here are the Ontario cities ranked by the biggest to smallest income gaps for home affordability.
Canada’s economy is in for a few years of reduced growth according to a new report from Deloitte.
The outlook shows a slump in economic growth from 3% in 2017 to 2% this year and to 1.4% by 2020.
It cites high household debt, rising interest rates, flat real estate markets, and weaker employment growth, for a predicted slowdown in consumer spending.
There is also the impact of external factors including a slower global economy, US protectionism, and tighter monetary policy in North America and Europe.
“The signs that the North American economy is in the late stages of a business cycle are all around us, from a record long bull market in US equities to low unemployment rates and rising central bank rates,” says Deloitte Canada’s Chief Economist, Craig Alexander. “The negotiation of USMCA reduces the downside risks to the Canadian economy, and economic growth should persist. However, businesses should still prepare for more moderate domestic demand growth and a weaker US economy over the medium term.”
The global economy is expected to deliver strong growth of close to 4% in 2018, but the pace of expansion will drop to 3.2% in 2020.
Ontario’s premier needs to push ahead with the assistance promised to the province’s potential home buyers.
The Ontario Real Estate Association (OREA), Ontario Home Builders Association (OHBA) and the Federation of Rental-Housing Providers of Ontario (FRPO) met this week to discuss housing policy and are calling on the Ford government to implement solutions to increase housing supply and assist first-time buyers.
“Keeping the dream of home ownership alive in Ontario requires bold policies and action from the provincial government,” said Tim Hudak, Chief Executive Officer, OREA. “First and foremost, to get more new homes in the marketplace, the building approvals process must be streamlined and zoning updated to allow for more homes in the right places. The best and fastest way to give Ontario’s first-time home buyers a break is to eliminate the punishing land transfer tax for first-time buyers.”
Along with increased supply and less red tape, the organizations are calling for the government to eliminate the land transfer tax for first-time home buyers or dramatically increase the current rebate offered to first-time buyers.
They also want a return of the Ontario Municipal Board which they say has traditionally taken the NIMBY out of housing decisions. They say bringing back the OMB will mean evidence-based planning decisions, which will create more housing supply and choice.
Home sales in British Columbia remain weak following the past few years of growth.
Across the province there was a 33.2% decrease in sales in September compared to a year earlier with a total of 5,573 units according to the latest data from the British Columbia Real Estate Association.
“BC home sales continue at a slower pace compared to last year,” said Cameron Muir, BCREA Chief Economist. “The impact on affordability and purchasing power caused by the mortgage stress test and moderately higher interest rates are negating the effect of the extraordinarily strong performance of BC’s economy over the last five years.”
The weaker sales impacted prices with the average selling price falling 1.1% to $685,749. Total dollar volume of sales was $3.8 billion, down 34% year-over-year.
Year-to-date, BC residential sales dollar volume was down 21.3% to $45 billion, compared with the same period in 2017. Residential unit sales decreased 22.5% to 63,251 units, while the average MLS residential price was up 1.5% to $716,096.
Condo rents in the Greater Toronto Area increased 9.4% year-over-year on a per square foot basis in the third quarter of 2018.
Urbanation reports that tight supply of rental units pushed the average rent up to $3.26 per square foot although average monthly rent payments rose slightly less as the average unit size leased in Q3-2018 declined to 731 sf from 744 sf in Q3-2017.
The increase means that the average rent in the GTA was $2,385, up 7.6% year-over-year.
The number of condo lease transactions reached their highest third quarter level in three years at 8,186 units, up 5% year-over-year as new supply became available.
More supply required
There was a slowdown in purpose-built rental construction starts (826 units) sharply lower than the recent high of 2,635 starts in Q2-2018. It meant the lowest quarterly level of starts of the past two years.
Total inventory of purpose-built rentals under construction moved up to 11,172 units — the highest level in more than 30 years and 56% higher than a year earlier (7,167 units) and next year a record 28,163 apartments reach completion, including 4,419 purpose-built rental units.
“Rapid rent growth has persisted in the GTA for over two years now, making it very clear that much higher levels of supply are needed to create a balanced market environment,” said Shaun Hildebrand, President of Urbanation. “While increasing condo completions should begin to have at least some calming effect on rent increases next year, more upward momentum in purpose-rental construction is required to meet overall demand.”
Canadian housing starts fell to the lowest in almost two years in September, led by a drop in British Columbia.
Builders began work on an annualized pace of 188,683 units last month, down 5.1 percent from August, Canada Mortgage and Housing Corp. reported Tuesday. That trailed all 11 forecasts in a Bloomberg survey.
Canada’s housing market has slowed this year, hindered by rising mortgage rates and tougher qualification rules. Tuesday’s report adds to evidence real estate is starting to act as a drag on growth.
“As these forces continue to weigh on the housing market, we see residential investment turning from a boost to a drag on gross domestic product in 2019,” Royce Mendes, an economist at CIBC World Markets, said in a research note.
It was the third straight monthly decline, and starts fell to the lowest level since November 2016, driven by an 8.9 percent drop in urban multiple-unit projects. Construction on new single-unit homes rose 2 percent.
Starts are forecast to slow this year to 214,000 units, and again to 197,000 units in 2019, from a peak of 226,000 in 2017, according to a separate Bloomberg survey of economists.
British Columbia saw the most significant deterioration, with starts falling 43 percent in September to an annualized 25,611 units, the housing agency’s report showed. They dropped 42 percent in Vancouver and 56 percent in Victoria.
Part of the nationwide decline reflects a slowdown from an unsustainable peak of about 247,000 units in June, Royal Bank of Canada senior economist Nathan Janzen said by phone from Toronto. That could allow the central bank to continue lifting interest rates, after it hiked four times since mid-2017.
“The slowing to a more manageable pace of activity should be welcomed by the Bank of Canada and isn’t expected to prevent further gradual interest rate hikes,” Janzen said.
While fear keeps us from danger, it also can keep us from many other amazing experiences.
Your palms are sweaty. Your stomach has that light, unsettled feeling. Your mind races eagerly from thought to thought.
Fear is an innate part of the human experience and has been essential to our survival as a species for thousands of years. While fear keeps us from danger, it also can keep us from many other amazing experiences.
Recently, I was asked to speak at a community networking event. I was honored to be asked and excited about the opportunity, but fear reared its ugly head. Like it is for many others, public speaking is outside my comfort zone. The thought of addressing a crowd full of people was overwhelming. Would I speak well? Would they learn from me? Could I inspire them?
Doubt sunk in. A flurry of negative thoughts raged through my mind, from stumbling over my words to physically stumbling over the podium. I had a choice: Give into fear and maintain the status quo, or challenge myself and give it my best.
I accepted the offer and decided not to let fear get in my way. To do the best job possible, I knew extensive preparation was essential. I took plenty of time to prepare my points, hone my message and practice out loud. I was nervous, but ready.
Ultimately, the presentation went well, and I got tons of great feedback. I’m glad I accepted the offer and tried something new.
Like many people faced with a career challenge, it’s easy to take the comfortable path. However, when you do this – whether for public speaking, a big promotion or a move across the country – you’ll always wonder about the road less traveled.
The next time fear creeps up, rather than considering it a warning of impending failure, view it as a sign you’re on the right path. Some of the world’s most successful entrepreneurs and inventors attest that fear isn’t always a warning of the negative; it’s often a signal that you’re on your way to success.
When facing doubt, it’s important to realize fear is not unique to you. Everyone experiences fear, even those you might feel are immune to it. Will Ferrell’s 2017 commencement speech for the University of Southern California made this point perfectly.
“You’re never not afraid. I’m still afraid,” Ferrell said. “I was afraid to write this speech. And now, I’m just realizing how many people are watching me right now, and it’s scary. Can you please look away while I deliver the rest of the speech? But my fear of failure never approached in magnitude my fear of what if. What if I never tried at all?”
For the graduates about to embark on a brand-new adventure, he offered some advice that I think is fitting for just about anyone:
So next time you feel fear holding you back from trying something new – whether in your personal or professional life – I encourage you to push those feelings down and stomp them with your foot. Then be bold and see what happens. Chances are, you’ll succeed. At the very least, you’ll be glad you tried.
The annual pace of Canadian housing starts fell to their lowest level in nearly two years in September.
Canada Mortgage and Housing Corp. says the seasonally adjusted annual rate came in at 188,683 units last month, down from 198,843 in August.
Thomson Reuters Eikon says economists had expected an annual rate of 210,000 for September.
September marks the third straight monthly decline.
The slowdown in the pace of housing starts comes amid rising interest rates from the Bank of Canada, and more restrictive mortgage rules.
“The September housing starts report fits with the relative calm and return to normality in sales, market balance and price growth that we are seeing across most of the country this year, in particular Toronto, following speculative excesses in Southern Ontario earlier last year and a moderate correction in response to policy measures earlier this year,” wrote Sal Guatieri, a senior economist with BMO Capital Markets, in a note.
“Demand continues to be supported by the fastest population growth in 27 years and new millennial-led households. A calmer housing market is just what the doctor ordered, and won’t discourage the Bank of Canada from raising rates on Oct. 24.”
CMHC says the pace of urban starts fell by 5.9 per cent to 175,653 units. The slowdown was dragged down by an 8.9 per cent drop to 122,656 units in urban multiple-unit projects such as condos, apartments and townhouses. Single-detached urban starts increased by two per cent to 52,997.
Rural starts were estimated at a seasonally adjusted annual rate of 13,030 units, while the six-month moving average of the monthly seasonally adjusted annual rates was 207,768 for September, down from 213,966 in August.
British Columbia led the declines with a drop of 43.3 per cent due to stiffer mortgage rules and growing lack of affordability, particularly in the Greater Vancouver area. Alberta also saw a drop of 34.8 per cent, amid a weakening in the oil-producing economies.
Meanwhile, Ontario housing starts increased 21.3 per cent, led by Toronto condos and Quebec was up 15.4 per cent.
Maziar Moini, Broker of Record - Home Leader Realty Inc.
300 Richmond St. W., #300, Toronto, ON M5V-1X2
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