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This Week’s Top Stories: Toronto and Vancouver Real Estate Out of Reach For Local Incomes, and Tens of Thousands Are Behind on Rent

Time for your weekly cheat sheet on this week’s top stories. 

Canadian Real Estate

Buying A Typical Home In Canada? Cities Now Require Incomes Of Up To $230,000

Buying a typical home across Canada is now out of reach for many, especially if it’s where the jobs are. A typical non-condo apartment in Toronto, requires a household income of $178,499 per year. That’s more than double the median income. In Vancouver, a “typical” non-condo unit requires a household income of $230,488 to carry a mortgage. The middle class is basically priced out of anything but a small, one-bedroom condo. Even then, they’d have to spend years saving a downpayment. 

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Over 125,000 Canadian Renters Are In Arrears, And Toronto Represents Almost A Third

Tens of thousands of renters are in arrears, and Toronto represents almost a third of them. There were 125,200 people behind in rent as of October 2020, representing 6.11% of private rental stock. Toronto represents 50.36% of Ontario’s rental arrears, and 29.81% of Canada’s total. The arrears stat, as high as it is, is only a part of the total in arrears, since it only includes rentals with 4 or more units. 

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Canadian Households Now Need Up To 34 Years Of Savings For A Downpayment

Canadians now need to save for the longest time in history for the minimum downpayment on a home. National Bank of Canada estimates the median household needs 60 months of savings for a downpayment. This blows past the 1989 previous peak, and it’s much worse in major cities. Greater Toronto requires up to 289 months to save for a “typical” non-condo. In Vancouver, the median household needs 409 months to save for a non-condo. That’s 24 and 34 years, respectively, to just save the minimum downpayment in two of Canada’s largest job markets.

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The Bottom Fifth Of Canada’s Households Can No Longer Afford Housing In Big Cities

The bottom fifth of households can no longer afford housing of any kind, in Canada’s big cities. In Toronto and Vancouver, this income bracket can only afford 0.2% of purpose-built apartment rentals. Montreal is a little better with 15.3% of rentals affordable to this income bracket. That said, it’s still insufficient for the level of housing required. No market has ever been able to maintain such a disconnect for very long. Young people tend to leave and move to cities they can afford. Hollowing out a whole class of people tends to not exactly be sustainable.

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Pandemic Sees Canadians Become The Most Dissatisfied Since 2003, Says StatCan Study

Canadians are becoming increasingly more dissatisfied with life, according to a StatCan study. The average Canadian rated life satisfactions as a 6.71 out of 10, down 1.38 points from 2018. Breaking it down, 40% of people rate life at or above 8, and 40% rated live a 6 or lower. Comparing the data to 2018, they found a polarization of people. More people are now ranking higher or lower in life satisfaction. The middle class is disappearing, and so is a middle level satisfaction with life.

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Bank Of Canada Data Shows They’re Past Peak Mortgage Bond Buying

Canada’s central bank holdings show they’ve scaled back Canada Mortgage Bond (CMB) buying. Disclosure data shows they held $9.66 billion in CMBs on Dec 30, 2020, down 0.65% from a month before. The annual increase is still 1,803 % from a year before, but this is the first decline we’ve seen. The slowing can potentially lead to higher mortgage rates in the not so distant future. Which is a good thing, considering home sales are moving at a record pace, and don’t need stimulus.

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Vancouver Real Estate

Greater Vancouver Real Estate Prices Jump, While City Condos Slump

Greater Vancouver real estate prices are rising, but the gains are mostly for detached homes. Detached homes reached a typical price of $1,576,800 in January, up 10.8% from a year ago. A typical condo apartment reached a price of $680,800, up 2.2% over the same period. Both are down from three years ago, with prices still down 0.5% and 1.4% from 3 years ago, respectively. Detached homes are driving the trend, and it’s largely driven by fast rising suburban prices. 

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3 Comments

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  • Leonardo 2 weeks ago

    Nobody is forcing people to move to Toronto or Vancouver. Choices have consequences. It has been a well known fact that the cost of living in TO and VAN is very high good jobs a few and even the good ones do not pay enough to compensate for the cost of living differential. The same can be said about London, HK, Sydney, etc… Now many have purchased RE in those expensive markets becoming slaves to their jobs and their only salvation is perpetual increase in market value. If you want to live in a funky city, you pay the price and often end up not having any time to enjoy what the city has to offer.
    Canada is a big country with many affordable markets with good standard of living. Many immigrants choose TO or Van and end up bitterly disappointed. Canada is not only TO or Van. It is not so hard in other places where most Canadians live.

    • Li 2 weeks ago

      The government’s genius “super cluster” plan literally forces people in various industries to only be able to seek employment in one of these regions.

    • SH 2 weeks ago

      GTA and GVR combined represent about 25% of the country’s population. If you expand it to include exurbs, it’s closer to 30%

      I completely agree with you that Canadians should explore other cities (frankly, I think young Canadians are better advised to emigrate). But it isn’t very sustainable or healthy for a country to say that nobody aside from the 1% should even bother with two main population centres containing nearly a third of the country’s people.

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