The rebound in Canada's housing market has been so sharp that affordability is eroding, a new study say.
The Desjardins Affordability Index, reported quarterly by Desjardins Economic Studies, dipped below its historic average in the third quarter, meaning houses were less affordable to purchase, after a little more than a year in affordable territory. The average property price hit a new high of $328,762, a gain of 7.1 per cent from the second quarter.
"The improved economic outlook and low mortgage rates have fuelled a strong comeback by buyers. The number of sales has taken back all of the ground lost during the recession, driving prices higher," the Desjardins report said.
Still, prices varied wildly from coast to coast in the third quarter:
- In Ontario "the nascent economic recovery ... has driven up demand for homes. The average home price hit an unmatched peak in the third quarter ($324,873) thanks to sharp growth in Toronto. Affordability thus deteriorated in the province, going to its historic average. The crisis has still left its mark; Ontarians' average disposable income has fallen substantially, going from $79,299 a year ago to $77,601 in the third quarter of 2009."
- Affordability in Quebec slipped, as a shortage of housing has driven prices higher.
- Calgary became more affordable, for the first time since 2005 as prices fell 2 per cent.
- Vancouver is "by the far the country's most expensive market, with an average home price of $603,165 in the third quarter. From the second to third quarters, the market saw prices explode, rising an average of $92,499."