Canada.  In Toronto and Vancouver, an increasingly unsustainable real estate market

Canada. In Toronto and Vancouver, an increasingly unsustainable real estate market

In an effort to curb accelerating inflation, the Bank of Canada has raised interest rates four times, making home ownership more difficult, and learn about industry players interviewed before Radio Canadaincluding Scotiabank Chief Economist Jean-François Perrault:

“Unless there is a significant drop in home prices, which we don’t necessarily expect, when interest rates go up, that limits access further.”

But here it is: a survey conducted by Ratehub.ca, which reports The Globe and MailHe explains that it is now necessary to earn a salary of C$220,000 per year (€167,000) to buy a home in Toronto or Vancouver, in addition to having to make a down payment equal to 20% of the mortgage. An additional hurdle: Potential buyers must undergo a mortgage stress test in order, the paper notes, “To ensure that buyers can pay their mortgage payments in the event of an increase in interest rates.”.

Are the salaries sufficient?

According to Canadian job site Jobillico, the average salary in Canada in September 2021 was $65,773 per year (€50,250) and “The trend is increasing. In other words, the majority of Canadians earn more money than the previous year.”.

However, immigrants and other newcomers to Canada generally earn less. Statistics Canada survey of their salaries as of 2019, quoted by toronto starbetween that “Newcomers who previously obtained study and work permits earned a median entry salary of CAD$44,600,” That is equivalent to 34,070 euros.

Rising rents

To add to this complex situation, Reuters Reports suggest that consumers also have to deal with a significant increase in rents. One-bedroom apartment rents have increased 13.7% on average in Canada since the beginning of the year. These jumps are 18.5% in Toronto and 19.2% in Vancouver. So it is now necessary to pay an average of 1,840 euros for a one-bedroom apartment in Vancouver and 1,670 euros in Toronto. Additionally, the agency notes, “The competition has shifted to rents, with landlords demanding months of rent up front and sometimes pitting tenants against each other to see who will pay more.”

Toronto real estate agent Imran Khan believes rental demand for condominiums will be further boosted by a post-pandemic return to the city and increased immigration.

“We live in one of those unique times where buyers, sellers and renters all strugglesays Dan Scarrow, president of Macdonald Realty, a Vancouver real estate firm. Usually there is a winner but I think this time it’s really a problem for everyone”.

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