{"id":8926,"date":"2020-12-30T15:29:39","date_gmt":"2020-12-30T15:29:39","guid":{"rendered":"https:\/\/www.canadianrealestatemagazine.ca\/shortlived-affordability-gains-eroded-in-q3\/"},"modified":"2023-10-24T04:15:02","modified_gmt":"2023-10-24T04:15:02","slug":"shortlived-affordability-gains-eroded-in-q3","status":"publish","type":"post","link":"https:\/\/www.canadianrealestatemagazine.ca\/news\/shortlived-affordability-gains-eroded-in-q3\/","title":{"rendered":"Short-lived affordability gains eroded in Q3"},"content":{"rendered":"

Short-lived affordability gains in Canada\u2019s housing market receded in the third quarter of the year, owing to voracious demand for detached housing and nascent signs of income precarity.<\/p>\n

A report from Economics noted that market activity during Q2 was quelled by the coronavirus, unintentionally boosting affordability. However, those gains were all but lost in the June quarter.<\/p>\n

\u201cAll markets we track saw an overall deterioration in ownership affordability,\u201d stated the report from RBC Economics\u2019 Robert Hogue. \u201cPerhaps more noteworthy, the pandemic created new market dynamics impacting affordability trends differently across categories. Chief among them are soaring demand for larger living space and reduced attachment to live in, or near, core urban areas. Single-detached and other low-rise homes have become highly coveted and pricier as a result. And the ability to work from home has helped spread the heat\u2014and affordability erosion\u2014to all sorts of markets.\u201d<\/p>\n

That scorching demand for ground-related housing erased the affordability gains made in major Canadian cities\u2019 condo submarkets. For example, although RBC\u2019s condo apartment affordability measure decreased (indicating greater affordability) in Toronto because of a supply glut, its single-detached affordability measure increased far more.<\/p>\n

Moreover, Toronto-based, president of CanWise Financial and co-founder of Ratehub.ca, is dubious that affordability ever returned to the housing market, even with surplus condominium supply, because historically low interest rates surged demand.<\/p>\n

\u201cAffordability issues have not gone anywhere\u2014they never left\u2014and I think in the mortgage industry<\/a>, we\u2019re looking for slow and stable growth,\u201d he said. \u201cWe don\u2019t want things to get too out of hand like they were in 2017 when the housing market was out of control. Absolutely, [low rates] will add to existing affordability issues.\u201d<\/p>\n

The RBC Economics report nevertheless contends that Canadians temporarily enjoyed elevated affordability during the second quarter, thanks to generous government financial aid in the form of the Canada Emergency Response Benefit.<\/p>\n

\u201cA partial retracement in government transfers caused household disposable income to fall 3.1% in the third quarter. With the imminent start of mass vaccination brightening the economic outlook in 2021, we expect further dialling down of transfers in the period ahead.\u201d<\/p>\n

Sustained property appreciation will also eat away at those Q2 affordability gains through 2021, in some regions more than others, but low mortgage rates can offset some of that.<\/p>\n

\u201cBuyers in Canada\u2019s least affordable markets\u2014Vancouver, Toronto and Victoria\u2014are most vulnerable to any erosion in affordability given how stretched they already are, especially when shopping for a single-detached home,\u201d said the report. \u201cLocal buyers in many smaller markets may also be challenged by rapid price increases. Strong demand is putting intense pressure on their housing stock.\u201d<\/p>\n

However, the report proffers a clue about where to find respite from the bidding wars and rapidly escalating prices that have in Canada for the last few years. Save for Ottawa, virtually all Canadian markets were more affordable last quarter than in Q3-2019, and rising affordability woes are predominantly a consequence of robust demand for single-family detached houses.<\/p>\n

\u201cCondo apartments are a generally more achievable option for buyers,\u201d said the report.<\/p>\n","protected":false},"excerpt":{"rendered":"

Short-lived affordability gains in Canada\u2019s housing market receded in the third quarter of the year, owing to voracious demand for detached housing and nascent signs of income precarity. A report from Economics noted that market activity during Q2 was quelled by the coronavirus, unintentionally boosting affordability. However, those gains were all but lost in the […]<\/p>\n","protected":false},"author":6,"featured_media":23080,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/posts\/8926"}],"collection":[{"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/comments?post=8926"}],"version-history":[{"count":2,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/posts\/8926\/revisions"}],"predecessor-version":[{"id":23079,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/posts\/8926\/revisions\/23079"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/media\/23080"}],"wp:attachment":[{"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/media?parent=8926"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/categories?post=8926"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/tags?post=8926"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}