Posthaste: You need to plunk down at least $175,000 and 40% of your monthly income to afford a home in these cities

 

Canadian housing affordability is, rightfully, emerging as an election issue (whenever that will be held) — it certainly is on the radar of the federal government that is hoping to get a majority in the next cycle.

A new report by Re/Max shows that some of Canada’s most populous cities require households with median income to plunk down at least $175,000 for a 20 per cent downpayment and still had to allocate more than 40 per cent of their monthly income for the next 20 to 25 years to purchase a house.

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Not surprisingly, Vancouver emerged as the most unaffordable Canadian city, according to the survey conducted by Leger, with those with median annual household incomes of $97,620 plunking down $234,572 as downpayment and still having to part with 50 per cent of their monthly income on mortgage to afford their $1.17 million home in the city.

In neighbouring Victoria, you needed to find nearly $240,000 to pay off a fifth off the house and still part with 47 per cent of your income (assuming median household income of $108,010) on monthly payments, Re/Max data shows.

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In Toronto, you needed to cough up nearly $218,000 for a 20 per cent downpayment and also allocate 47 per cent of your median income  ($97,640) for the privilege.

Mississauga ($183,118 downpayment and 46 per cent of monthly median income of $83,000) and Brampton ($175,366 and 42 per cent of the $87,290 average income), both in Ontario, rounded up the top five Canadian cities that are straining household budgets, according to the survey.

Sensing the desperation among Canadians, the federal Liberal government yesterday announced it is investing nearly $120 million into affordable rental units in Brampton. Prime Minister Justin Trudeau is also expected to make a housing announcement in Hamilton, Ont. today.

As many as 42 per cent of Canadians believe the high price of real estate was a barrier to entry into the market, up 4 per cent from last year, according to the survey published this morning.

The price surge is forcing one in three (33 per cent) Canadian homebuyers to explore alternative options to help them get a foot into the housing market.

“These include renting out a portion of a primary residence (21 per cent), pooling finances with friends or family to purchase a home (13 per cent) or living with like-minded neighbours in a co-op/shared living arrangement (seven per cent),” the survey noted.

Creative solutions to achieve affordable home ownership will only take us so far, as will ‘stop-gap’ measures such as the mortgage stress test, says Christopher Alexander, executive vice-president, Re/Max of Ontario-Atlantic Canada.

“Without a national and locally supported strategy to significantly increase housing supply, prices will continue to rise. It shouldn’t be the burden of the next generation of homebuyers to figure out how to ‘get around’ the supply shortage and resulting affordability crisis when there are feasible, long-term solutions within reach,” Alexander noted.

Canadian home prices are leading the world and creating new risks for the economy. A new report by Oxford Economics identifies Canada as one of the four riskiest developed housing markets in the world, with home prices overvalued by around 11.8 per cent compared to long-term trends.

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© Ian Lindsay/Postmedia/File Fishing boats near the Nisga’a village of Gingolx, close to Pearse Island where the 12-million-tonne-per-year LNG project is to be located.

A NEW PROJECT: The development of a liquid natural gas export project based in British Columbia with estimated economic impact of $55 billion took a major step forward Monday as the group behind the proposal kicked off the regulatory process by filing an initial project description with Ottawa and the government of British Columbia, writes Barbara Shecter. The project is a partnership between The Nisga’a Nation, Texas-based liquid

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 natural gas export facilities developer Western LNG and Rockies LNG, a limited partnership of oil-and-gas producers that collectively produce about 20 per cent of Canada’s natural gas.

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Video: Sarah Pavan, Melissa Humana-Paredes back on the beach for Tokyo Olympics (cbc.ca)