Toronto outpaces Vancouver in terms of the least affordable homes
Because of sharply growing housing prices Toronto outpaced Vancouver and became the least affordable market in Canada, says RBC, pointing to reduced supply as one of the main reasons.
Last quarter, the bank's aggregate affordability rate in Toronto rose by 3 points and reached 63.7%. As a result, that quarter showed the worst affordability level since 1990, when interest rates were as high as 14%. It should be noted that on RBC scale the higher the rate, the worse is housing affordability.
The affordability in Toronto is expected to keep getting worse in 2017.
According to RBC, the on-going prices growth in this area will remain next year, however, the pace will be more moderate.
Small condominiums are becoming popular due to high real estate prices
Small properties are getting more and more popular with the Canadian youth, and the sector of downsized condos is feeling it the most.
According to the Canada Mortgage and Housing Corp. (CMHC), the construction of single-detached houses was down this year, following the tendency that has started four years ago. Together with the increasing market demand, it led to sharp prices growth in this sector.
Are the new no-interest loans so good for British Columbia?
On December 15, B.C. Premier Christy Clark surprised everyone by announcing a new program for qualified first-time homebuyers, providing no-interest loans of up to $37,500 for their down payments.
Starting January, the Home Owner Mortgage and Equity (HOME) Partnership Program will give buyers, who are pre-approved for an insured mortgage, 5% of the total property price (but not more than $37,500) for 25 years. They won’t have to make any payments during the first five years. Then the borrowers will start paying off their debts under market interest rates. Canadian citizens or permanent residents whose income is less than $150,000 can participate in this program in case the price of their purchase doesn’t exceed $750,000.