As interest rates rise, Canada’s housing market is showing signs of cooling. But the idea of owning a home – and even renting it out – still makes some people feel stretched.
Although he does what he describes as a “pretty good” single income and has a down payment, 54-year-old government official Craig Dyckman says he is struggling to find a home he can afford near his community in Jamseg. , NB
Daikman currently lives with her mother in a home she owns an hour west of Moncton, but hopes to buy a home with her young daughter soon.
In addition to mortgage costs, he is concerned about covering related costs such as insurance and property tax such as inflation increases the cost of living.
“This should not be a luxury house, but a house where I can live … where I have enough left so I don’t have to worry about groceries or heat,” he told Cross Country Checkup.
Politicians, economists and advocates alike define the hot market with a lack of supply. Many say what is needed is more affordable housing.
But as more people find themselves pushed out of the market, the definition of what is affordable may seem vague, says Julietta Peruca, deputy director of The Shift, a non-profit organization that advocates housing as human. right, not as a commodity.
“I feel that we are currently using our imagination to determine affordable housing, unfortunately,” she said.
“The affordability at the moment and the price of our home are largely determined by the market itself. And that’s why we see that housing costs have far exceeded household incomes.
WATCH Against the background of rising interest rates, housing prices in Toronto, Vancouver are falling:
Home sales in Toronto, Vancouver collapsed in April
Home sales in Toronto and Vancouver fell sharply in April, a sign of rising interest rates, cooling two of Canada’s hottest housing markets. 1:56
Affordable, defined as 30% of pre-tax income
The Canadian Mortgage and Housing Corporation (CMHC) defines housing as affordable when it is less than 30 percent of pre-tax income and may include subsidized housing, market rents and property.
If we accept pre-tax income of $ 55,700 – average household income before tax in 2020, according to Canadian statistics, the average household will have just under $ 1,400 a month to spend on housing.
For Eric Burnett, a social worker, buying a home in Hamilton, where he had previously lived with his partner, was a daunting prospect. At the time, the two were paying “a lot” of rent for a “good place” as they watched house prices skyrocket, he told Checkup.
“We have just started our career. For example, we will be in our 40s until we can afford something like that, ”he recalls.
So Burnett and his partner decided it was time to jump in and look elsewhere. They moved to Sydney, North America, first renting an apartment and eventually buying a home last October.
This move works well for them, he says, but he is still worried about accessibility elsewhere.
“I feel I have a good income, and yet if I lived in Toronto, I would be ruined,” he said. “I don’t know how people do it.”
WATCH Inflation reaches 31-year high in Canada:
Inflation in Canada jumped to 6.7% in the biggest jump since 1991
Inflation in Canada jumped to 6.7% in March, reaching a 31-year high. Economists warn that borrowers should expect further interest rates to rise as the Bank of Canada tries to cool rising inflation. 02:00
Wigs believe that the figure of 30 percent is due to an update and that a more sophisticated approach that takes into account affordability should be used to calculate housing costs.
For example, the affordability of a double-income household supported by an extended family must be calculated differently from that of a single-parent household working in two jobs and having to pay for full-time childcare.
“I think a lot of us stay out of that definition of accessibility,” Wig said. “So many of us are experiencing a housing market that does not meet our needs.
“But I don’t think people feel it as acutely as those low-income groups that are also disproportionately colored in Canada, the indigenous people. [and] marginalized communities’.
Burnett says housing affordability challenges are systemic and need to be addressed through greater investment in social housing, increased housing and better public transport in cities. Real estate speculation and prices must also be limited, he added.
“Housing is essential,” Burnett said.
Access to safe and secure housing is crucial: economist
Dealing with housing affordability will require different responses to different scenarios, says Zur Somerville, an economist at the Sauder School of Business at the University of British Columbia.
“Much of the focus on housing affordability is on focusing on people’s ability to access housing ownership,” Somerville said.
“I think the main issue should be the ability of people to have access to safe, secure housing of the right size and decent quality.
Experts say the residential towers under construction are being built a few blocks from houses in Burnaby, British Columbia. Increasing urban density may be the key to making housing more affordable. (Daryl Dyke / Canadian Press)
This means ensuring that low-income households have access to subsidized options and that the overall housing supply is adequate.
“That means it’s money and it’s supply – and money is taxes, and supply is a change in the environment,” Somerville said, referring to the need for increased density. “People are very resilient to that.”
Daikman recently considered buying a used home with a trailer that he could move to a property he owns.
He was at the market for 11 hours, he said.
Until he received a response from the seller, he was sold – on request.
Written by Jason Vermes with files by Steve Howard and Abby Plein Air.
Add Comment