What is the current state of the Canadian real estate market? It’s rising exponentially to the point that the Canadian Real Estate Association (CREA) predicts that the home market will see new highs this year. More than 700,000 properties will come up for sale in 2021, up from 551,262 last year, according to the organization. This year, the national average home price will rise by 16.5 percent annually to $665,000. Much of this is because demand is outpacing production at an all-time high.
Will this strength be maintained in 2022? With 614,000 sales and values below $680,000, CREA predicts the Canadian real estate market will continue to cool down next year.
The latest prediction comes after CREA reported that home revenues rose 39.2% year over year in February, with values up 25% to $678,091 from a year earlier. Your residence – single, semi-detached, townhouse, or condominium – is clearly making more than you are, according to a recent survey from a major financial company.
Your House Makes More Than You Do
Do you own a property in the Canadian housing market? According to the new Bank of Montreal report, your property is definitely making more than you are at your 9-to-5 job. If you live in a commercial real estate in London Ontario or a semi-detached house in the beautiful Okanagan Valley, the rising valuation of your simple home keeps making you richer than working your ordinary job.
Home costs are growing higher than household incomes and gross annual income, according to a BMO survey titled “Your House Makes More Than You.” Though this isn’t true about the entire Canadian real estate industry, it is true in Ontario and several parts of British Columbia.
The median family income in Canada is $83,900, but the national average home price is $531,000! Inside Canada, the Hamilton-Burlington real estate market, located southwest of Toronto, has an average house price of $786,600, up to $154,000, or 24.24 percent, in the last year. According to the 2016 census, the area’s average household income is just over $75,000.
Is Homeownership Impossible in Canada?
There are fears that the homeownership goal is becoming less of a possibility for many Canadians as real estate values skyrocket. The statistics show some troubling patterns, especially for first-time homebuyers.
The amount of months it takes to save for a down payment on a house has reached an all-time record in Canada. According to a recent report from the National Bank of Canada, Canadians would need to save for the longest time in history to buy a home. According to NBC, the typical household would require 60 months of investment to make the full down payment. The previous record, set in 1989, was 57 months, which had dropped to by 1992.
Different NBC analyses show that Canadians should earn more in order to afford a mortgage. Just 20% of families in Toronto, for example, could afford a non-condo home and they would need to earn around $178,499 per year.
However, all hope is not lost! The record low-interest rates are one thing that home buyers have going for them. The Bank of Canada has cut interest rates to near-zero levels, making banking more affordable than it has ever been. The central bank has stated that it will not strengthen policy until the economy has fully recovered.
Overall, Canadian homebuyers live in a property market with its advantages and disadvantages. The most important thing is to save money, be prepared, do your homework, and have an excellent team of licensed top realtors in Canada by your side to help you safely manage this pandemic-affected real estate industry!