Ratehub, an online financial comparison platform, ranked 13 of Canada’s cities according to housing affordability by calculating the minimum annual income needed to buy an average home with a 10 per cent down payment, a 25-year amortization, $4,000 in annual property taxes and a monthly heating bill of $150.
uncertain
Ratehub → rank → 150
The analysis also looked at national real estate data on mortgage rates as well as the mortgage stress test to determine how much a prospective buyer would need to earn to qualify for a mortgage on an average-priced home in their local market.
asserted
buyer → look → market
The data revealed that Halifax recorded the largest improvement in affordability of any Canadian market in September, with the required income for an average home falling to $119,040 — $4,160 less than the $123,200 needed in August, according to Ratehub.
uncertain
income → reveal → Ratehub
Ottawa saw the second largest affordability improvement, with the required annual income falling by $2,630 from $137,400 to $134,770.
asserted
income → see → 134,770
Victoria ranked third, with the average income needed to buy an average home falling from $185,350 to $183,510, a decrease of $1,840.
asserted
income → rank → 1,840
The least affordable city in September was Vancouver, where the average home price was $1,075,900, and the income required to buy was $221,750, down $980 from August.
asserted
income → require → August
This is followed by Toronto, where prospective buyers needed to earn $191,320 annually in September to afford an average-priced home costing $917,600.
asserted
buyers → follow → 917,600
At the other end of the scale, Regina was the most affordable city, with prospective buyers needing an annual income of $81,000 to buy an average-priced home worth $343,900 in September.
asserted
buyers → need → September
Fredericton ranked as the second most affordable city, but it was also the only market to see affordability worsen between August and September.
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affordability → rank → August
The annual income required to buy an average home there rose slightly from $84,840 to $84,940.
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income → require → 84,940
However, Ratehub noted that while affordability technically decreased in Fredericton, it did so to such a minor extent that home buyers were unlikely to notice the difference.
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buyers → note → difference
Though it saw a $200 increase in the average home price, this added just $3 to the average monthly mortgage payment, the report said.
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report → see → payment
Other relatively affordable markets included Winnipeg, Edmonton and St. John’s, N.L., where prospective buyers needed annual incomes of $90,270, $95,000 and $95,980 respectively to afford an average-priced home.
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buyers → include → home
Elsewhere, the annual income needed to afford an average home fell to $153,050 in Hamilton, Ont., to $126,050 in Montreal, and to $124,320 in Calgary.
asserted
income → need → Calgary
Ratehub said that falling home prices were responsible for the improvement in affordability, but added that modest declines in the income required to qualify for a mortgage and in monthly mortgage payments aren’t likely to make a significant difference for most home buyers this fall.
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declines → say → buyers
The report said that a softer housing market combined with high gas prices and economic uncertainty could put further downward pressure on prices before the end of the year.
uncertain
market → say → year
But for mortgage costs to ease significantly, both home prices and mortgage rates typically need to decrease.
asserted
prices → ease → ?
While house prices fell in almost all markets in September, Ratehub noted that fixed mortgage rates inched higher during the month.
asserted
rates → fall → month
The Aporia
