Is The Housing Market Correction Here?

We have been hearing about a potential housing market correction coming to Canada for some time now. It has been years that stories have circulated about a housing bubble in Canada and both Vancouver and Toronto are among the most expensive places to live in North America.

They aren’t the only areas of BC or ONT that are expensive either. The cost of living has been getting arguably worse and it is on the minds of many Canadians.

The recent talk of a rate hike from the Bank of Canada also has some worried, with reports suggesting that a housing correction is potentially taking hold and that it could be significant, according to some experts.

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Critics have suggested however that no matter how much those prices might fall, or for any correction to finally show itself, it might not be enough to bring home prices anywhere close to affordable in places like Vancouver and Toronto.

Prices on new homes being built in the country have also reportedly become more expensive too, growing 7.9% compared to June last year. It isn’t uncommon to see homes around the Metro Vancouver region for well over $1 million, including apartments and townhomes.

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There are not many young working professionals who can afford these prices and many young adults today have already given up on the dream of eventually ever owning a home.

Even those families who are earning over $100k per year might still struggle to afford a detached home of their dreams in the city.

Decades To Save The Down Payment

For those expensive homes around Vancouver, Toronto, and other areas, according to a previous report from report from the National Bank of Canada (NBC) it could take decades for individuals and families to save up the necessary down payment.

Is the housing market correction coming? Is it already here? Does Canada need a housing market correction?

While home ownership is completely out of reach for many Canadians in areas like Vancouver, Toronto, and other cities, there are millions of Canadians who do own their homes.

Trying to navigate that situation of addressing the problem of a housing bubble, while also not making it worse with those actions that might be taken, has appeared to be a difficult task to balance. Things aren’t rapidly getting better right now in terms of affordability for many Canadians who are struggling with gas, rent, food, and more.

Does Canada Need More Affordable Housing Options?

Affordability is a big issue in Canada these days, but even before inflation became one of the most talked about problems of the day there were already widespread concerns about housing and living affordability in the country.

The cost of living isn’t cheap in Vancouver and inflation has only made things worse, pushing many families to the edge of their finances. With this struggle has come a lot of stress and anxiety for a number of Canadians who worry if they too might face homelessness or fall into poverty, tackle food insecurity, and so on. The problems surrounding affordability impact millions.

There is a desperate need for more affordable housing options in Vancouver and around the country. It has been estimated by the CMHC that the country might need some 5.8 million new homes by 2030 if they want to seriously try and tackle the housing affordability problem.

But not everyone agrees that this is a problem with a lack of supply. There are reports on the topic that point in a different direction, suggesting that in some instances in Canada housing supply might be keeping pace with population or even growing faster than it.

How can a lack of supply be the reason for the prices Canadians are seeing then? But we are still repeatedly hearing that it is a lack of supply.

What is the Average rent for 1 bedroom apartment in BC Cities?

Vancouver –  $2,394

Burnaby –  $2,089

Coquitlam – $2,075

New Wesstminster – $1,690

Richmond – $1,900

North Vancouver –  $2,233

Delta – $1,800

Port Coquitlam – $1,900

Surrey – $1,600

Maple Ridge – $1,698

Victoria – $1,925

These are the average rent prices in Vancouver and around other cities around BC according to rental platform Zumper, these averages do fluctuate and for some they are up more than 15% compared the year prior.

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Either way, Canadians are struggling with the cost of living and affordability in Canada. One survey from the Angus Reid Institute suggested that as many as half of Canadians can’t keep up with the heavy cost of living.

This struggle for many is also placing more need on community resources in Vancouver and elsewhere that are there to try and bridge the gap and help those individuals and families get by. The pandemic was already a struggle for them and now inflation hasn’t made things any easier as some find themselves lining up for the first time to ask for help.

Community Resources For Canadians

• community fridges have popped up in some Canadian cities and they allow anyone to anonymously come by and access whatever goods they might need that are in the community fridge storage
• pay what you can food market in Vancouver is a great way to help families who are struggling with food insecurity, you come by and take what you need and leave whatever you can.
• food banks are located all around BC and throughout Canada, including those like Greater Vancouver Food Bank, SHARE Food Bank, and Surrey Food Bank Society.

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With many Canadians struggling to meet their daily needs it has sparked more interest for money-saving tips and tricks that might help Canadians to get their dollars to stretch a little further for them. Now there are a number of coupon and saving niche social media pages that help Canadians find deals and get more for less whenever they can.

It isn’t a struggle that is unique to Canada either, countries all around the world are struggling with inflation and Canada isn’t suffering the worst inflation crisis among them, but for those here it is higher than it has been in decades.

The question that keeps getting asked is when will things start to get better? At least with gas prices declining a little recently around the Lower Mainland this has helped to ease some of that pressure, because those prices too had been climbing to all-time highs this year.

Vancouver Ranks As One Of Most Expensive Places to Live

Vancouver is one of the most expensive cities to live in North America. It recently came in 3rd place on a list of the most expensive, coming in ahead of other areas like Toronto and Mississauga.

This isn’t the first time that Vancouver has ranked among the most expensive places to live in Canada.

The city has held that title previously and it is no secret that the cost of living in Vancouver is continually growing out of reach for many.

Many across BC and in other provinces are finding it difficult, almost impossible, to land the home of their dreams because of the high cost of living here.

For some they’ve already sought to look elsewhere to see what they might find.

There are many full-time working individuals, some who might have 2 or 3 jobs even, who could still struggle at these prices and not have the income to qualify for the mortgage that is needed in an area like Vancouver or Toronto.

Nearby cities aren’t that much cheaper for buying houses and renting either.

You will find high prices across the Metro Vancouver region and multi-million dollar houses all around cities like Langley, Surrey, Port Coquitlam, Coquitlam, and other areas. As the affordability has worsened around Canada it has increased pressure from Canadians, they haven’t been shy in vocalizing their concerns about this issue.

High Cost of Living

Not only is Vancouver one of the most expensive cities in the country to live in but the city has also previously been ranked as one of the least affordable cities to live in the world.

Increasingly, Canadians are spending more of their income on shelter costs and some recent reports have suggested that if mortgage payments go much higher then it could mean more Canadians will be pushed to sell their home.

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Giving Up On The Dream of Owning A Home

With incomes for many not keeping up with the high cost of housing it is no wonder that many young Canadian families today are feeling the stress and why a number of Canadians have given up on the dream of ever owning a home at some point.

For those who do not own a home and who continue to rent they too are at risk of increasing rent prices.

It is no secret that many cities around Canada have had an affordability issue and the question is what political representatives might look to do about it.

The cost of living is one of the most important issues for Canadian voters.

Canadians have been hearing for years that this issue is being addressed in one way or another but here we are now in 2022 and Vancouver still ranks as one of the least affordable cities in North America.

Rent prices are climbing higher in multiple areas around this province and elsewhere, along with the rising inflation, which is causing great concern for many Canadians these days as reports have repeatedly suggested.

Some estimates suggest that as many as 80% of Canadians or more are worried that inflation is going to make things less affordable.

For those who are living in places like Vancouver, Toronto, and other expensive cities, they might not have much room to absorb those increases due to the high cost of living there, people are struggling as the cost of living worsens.

Around 25% of Canadians Might Need to Sell Their Home if Rates Continue to Rise: Survey Suggests

A recent survey shows that many Canadians are worried about affording their housing payments, about 25% might need to sell their home if the rates continue to rise.

Already, we have seen a sort of slowdown with price reductions rising in some places like Toronto over the last several weeks.

While financial experts have suggested that they might be looking to increase those rates to tackle the current inflation environment many Canadians are worried about what consequences this might have for them and the affordability of their homes.

Some critics have suggested that perhaps a potential solution might be to only increase rates for those who own multiple dwellings and not for those with one property who are residing in their forever home.

There is worry about increasing rates harming both speculators and end users.

In 2021 it was reported that Canadians had record high mortgage debt and this grew by billions through the pandemic.

In BC we have seen the price of many goods go up, from food to gas and more, and rent has also been climbing which is a nightmare for those who don’t own and have limited options.

There has been a crisis with affordable housing units around the country in places like Vancouver and Toronto for years now that does seem to be getting worse. The increasing costs are reportedly making it more difficult for Canadians to afford the things that they need, trying to maintain their mortgage and buy food etc.

One recent poll from the Angus-Reid Institute found that almost 60% of Canadians with a mortgage say that they are already feeling that pressure and further squeeze to their budgets.

Renters are also saying the same in that they too are feeling the financial stress, especially those who lose their affordable housing. When those BC renters lose their housing due to the property being sold to a development company this then forces those renters back into the market looking for housing, meanwhile rent in Vancouver has increased roughly 15% since last year, according to Zumper.

Rent has increased in cities all around the province and as a result it is becoming more unaffordable. Already there are many British Columbians out there who are trying to tackle with spending 50% or more of their income on shelter alone. Metro Vancouver rent has been reported to be the highest in the country.

60% of Canadians say they are worried about inflation

Inflation is one of the top issues for Canadians today, the affordability of life in Canada matters to millions and that issue isn’t going away so long as Canadians maintain that concern and look for Canadian political leaders to do something about it.

Canadians Struggle to Keep Up With Growing Cost of Living

Inflation is making it harder for many Canadians to get what they need. The country is seeing higher inflation than that which has been seen in years and recently increased to 5.1% in Jan of this year.

As things rise with regard to the cost of living around the country it means those with incomes that are unable to adapt to that increase in prices are going to be struggling.

The inflation in Canada pushing prices up for food and other daily expenses is something that will leave those individuals with less ability to get their necessities and more.

Canadians are already responding by making cuts to their daily habits to get through.

It could mean using coupons, buying bulk items, looking to eat less, looking to buy off brand, cutting out meat or other items. These are just a few steps that people have taken to address the rise in costs.

Over half of Canadians are struggling to keep up with the cost of living

One recent survey showed that it might be as much as half of Canadians who could be struggling to keep up with this inflation or costs of living rising in the country.

For those who are around the Metro Vancouver region they are also seeing some of the most expensive prices for gas in all of North America.

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The cost of living is a top issue for Canadian voters today. Come voting season we can expect that many Canadian representatives will start talking about this issue once more, vowing to address it in one way or another.

Canadians who are struggling today want to see action sooner rather than later. As things get more expensive it only means more will struggle to afford what they need and there could be devastating consequences for those who won’t be able to keep up.

Rising cost of rent and living in Canada

Right now rents in Vancouver are showing about a 16% increase with a price average at around $2,200 for an apartment to rent in Vancouver.

Toronto is around a 8% increase at $1,600 on average for an apartment in the city, according to recent data from the popular rental platform, Zumper.

Some other cities are seeing jumps around 13% in price for rent, 17%, 20%, or more.

Not every Canadian has a salary that is going to be able to keep up with these increases in the cost of living around BC and elsewhere around the country.

More than half of Canadians right now are estimated to be struggling with things currently, and social advocates and financial experts have warned that if things continue to economically decline with regard to the cost of living and inflation it will only push more into that struggle.

Housing Affordability at 30 Year Lows in Canada

Home prices are rising around Canada, as a number of cities in this country maintain a reputation today of being among the most expensive places to live in the world like Vancouver and Toronto.

Supply of homes is said to be tight and there is a strong demand still that the supply isn’t able to meet right now. The high cost already has some families and individuals looking elsewhere to see what they can afford for a home.

It’s believed that government stimulus and low interest rates have helped to fuel the problem of unaffordable housing in the country, according to some financial experts. And while a few have suggested (for years now) that we might see a housing bubble pop, others say that the demand still outpaces supply.

Canadian Home Prices Expected to Keep Rising

Through this year experts have suggested we will still see home prices in Canada rising. One recent report from Royal LePage discovered that the average price of a home in Canada grew more than 17 per cent year over year in the last part of 2021.

The average price for a home is said to be around $779,000 in Canada.

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Worsening Housing Affordability in Canada

This is a top issue for many Canadians as millions struggle with inflation and increasing cost of living for gas, food, homes, and more.

While one politician or another has suggested there are various programs established that have been established and are designed to be looking to address this issue, others say it isn’t enough that is being done. The proposed solutions might not be nearly enough to tackle the serious issue of housing affordability around the country.

Millions of Canadians are being priced out of home ownership and ever seeing that dream realized for themselves and for their families. Many have suggested that more actions are needed to drastically increase the housing supply around the country, though even then it isn’t clear that this alone will solve the problem.

The issue of affordability for homes in Canada is worse in some regions than others.

In BC and Ontario for example they are seeing a more severe unaffordability around these regions than those might be who are in the Prairies for example, or other Canadian regions.

Costs are still expected to continue rising and it isn’t clear when or if there might ever be some sort of correction in the Canada housing market, despite this being an assumption that some financial experts have suggested for years now might be coming.

Parents Gifting Billions To Make Home Purchases Possible in Canada

Homes are so expensive in Canada that many younger people today require help from their family in order to make the down payment. According to a recent report from CIBC Capital Markets it looks like for many first-time home buyers in Toronto that they are being given around $130k from parents to make that down payment for their home.

The avg down payment gift for a new house is $130k

Not everyone has parents or family that are available to help them like this and for that reason many Canadians are priced out of the real estate market. It has gotten so bad that a variety of financial experts have suggested over the years that the Canadian housing market is in a possible bubble and that might one day this real estate bubble might be headed for a crash.

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However, there are others who insist that perhaps this market will always go up, defying expectations and pricing even more Canadians out of the market as it goes up.

Over the past year in Canada there was $10 billion gifted to adult children so that they could be able to buy homes.

It has been estimated that about one third of those home buyers are getting help from parents. About one third of those first time Canadian home buyers are getting help from their parents so that they will be able to have the finances to make the transaction possible.

Another recent report ranks the Toronto and Vancouver housing markets to be some of the worst in the world today as far as bubble territory goes. The Vancouver and Toronto housing markets are seen by some to have a very high bubble risk, according to the 2021 Real Estate Bubble Index by UBS, along with other regions like Frankfurt, Hong Kong, Munich, and Zurich.

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The truth is that many Canadians are being continually priced out of the cities that they live in. And with inflation hitting recent highs things, worse than they had seen in 18 years, the situation is worsening in that it is becoming more expensive for everyday life in Canada and housing affordability. The cost of food and other goods is going up and expected to persist into next year.

Food banks are already preparing to see a rise in demand as the situation gets more costly for Canadians and they find themselves struggling to make ends meet.

First time home buyers are being priced out of the market as things continue to get more expensive. There are not many families who have the salary required to be to afford the down payment or the average home in the Lower Mainland that could easily cost millions of dollars for a single family home.

In areas around BC you can find many Canadians paying more than 30% of their income on their rent alone. Through the recent election that saw Trudeau win once again we heard that affordability was one of the biggest issues for Canadians. Various representatives have made promises about building houses and addressing this issue.

Some communities are looking to help those first home buyers with their down payment to make it possible for them to be able to achieve that dream of home ownership.

But these programs aren’t enough to meet the need that there is and they aren’t a long-term solution to the problem of why houses are so unaffordable in Canada.

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It is estimated that some 36% of young adults in Canada have already given up on the dream of owning a home one day.

No matter how hard some of those young adults might work they still just don’t think it is possible for them and with that comes a lot of potential psychological harm say experts, stress, and frustration.

Spotlight Grows on Housing Affordability Crisis in Canada

Housing affordability matters to Canadians and they have in the past made it clear that this is a top voting issue, affordability of housing and general living is a top priority for many in the country today.

Is It Enough? Langford Offering Down Payment Help to First Time Condo Buyers

One city in BC on Vancouver Island is looking to help some struggling British Columbians to be able to obtain their first condo unit with a new initiative. For those who are planning on buying a condo in the area the city is offering a new opportunity to help some individuals with getting help for that down-payment that they need to make.

Offering 5% Down Payment on Purchase of First Condo

The program offers a 5% helpful down-payment to those who are looking to make their first purchase. They are currently facing an affordability crisis in Langford and around Vancouver Island, like many areas in BC, and this is an effort to try and help that issue some.

Where are the funds coming from for the housing program? It’s reported that they will be stemming from fees that are charged to developers and that money is going to help first time home buyers.

There are hundreds of families who have already expressed interest in pursuing this opportunity in Langford, BC.

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Attainable Homeownership Program in Langford

The new Attainable Homeownership Program in Langford is going to provide that down payment help on a condo valued at $450,000 or less for those who get approved to take part. The program is looking to help at least 250 as a part of this initiative, but there are many thousands on Vancouver Island and throughout BC that need help with affordable housing.

It isn’t clear how fair this system of selecting those families is going to be, there will still be many who are left with nothing and there isn’t enough opportunity with the program to meet the need that is present unless it gets expanded to help all those who need assistance. While this new plan does offer some help to a few, it doesn’t do much to address the underlying crisis and issue of affordable housing in a significant way in BC.

Housing affordability is still one of the biggest issues for Canadians today.

With inflation hitting a recent 18 year high this also has many Canadians worried for the future and the potential for things to get worse, for the cost of living to get more expensive. Through the recent election we heard plenty about what representatives were going to do to address that affordability crisis but today in real time you have families struggling to keep a roof over their head and a market that continues to price them out of affording a home, with little being done to address it in an impactful way.

Average Kelownian Paying More Than 30% of Income On Rent

According to Stats Canada the average wage in Kelowna isn’t enough for people in the region to live comfortably. It has been estimated that the average income is around $46k or lower, but a previous report has asserted that residents in this area would need to make at least $52k in order to live comfortably.

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Most single households in the region will need to spend much more than 30% of their income to afford the average prices in rental properties that we are seeing in the market. It is an issue that isn’t found only in Kelowna, as Canadians around the country are feeling the heavy real estate prices.

Average Rent in Kelowna for 1 Bedroom $1,600+

According to Zumper right now the average rent for Kelowna is estimated to be around $1,600 which is still lower than the more than $2k that it is estimated the average 1 bedroom costs in Vancouver right now, but it is still too costly for many. For those who are earning an average income of around $46k they too will be struggling to afford those prices and live comfortably. If those rent prices in Kelowna and other cities continue to go up, and wages don’t rise along with them, then more are going to tackle with that struggle.

For anyone spending more than 30% of their income on housing alone it doesn’t leave room for much else.

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Housing affordability is still an issue, even though the election is over now and it isn’t being talked about as much. For Quebec, these issues on housing affordability in Canada could be central to their municipal elections. One thing is certain and that is that Canadians aren’t going to stop talking about this issue anytime soon, so long as that struggle continues for so many.

For those in Kelowna spending more than 30% of their income on rent they aren’t alone as a previous report by the Canadian Rental Housing Index back in 2016 found that almost half of those in the province were spending that much of their income just on rent.

It has been estimated that over 36% of non-homeowners have already given up on the dream of someday owning a home.

Pessimism appears to be growing also, as roughly 62% have reported that they think over the next decade they will be priced out of the housing market. We will have to wait and see how much of an impact the millions in funding that has been promised by the government will address the housing affordability situation and lack of affordable housing supply around the country.

Canada At High Risk of Correction In Home Values

Canada is at risk of a sharp correction in the housing market, according to a Canada housing agency. Prices have continued to increase for years and millions of Canadians are struggling with affordability, increasing numbers are giving up on the dream of owning a home one day. The price is out of reach for many, even for those with careers and 2 full time working partners contributing.

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But as the affordability in housing worsens the calls for government representatives to do something about it increases. But what is there to do? They need to juggle trying to approach different policies that might help to slow down the price, or reverse it some, without driving it too much lower which might negatively impact economic recovery and current home owners. Home affordability has become an issue in cities all over the world, it isn’t something specific to Vancouver.

Addressing Affordable Housing in Canada

Various policies have been tried to address the issue of housing affordability in Vancouver and other regions. Some of those actions have been empty home taxes or minimum down payment rules for housing, other ideas that have been floated include a temporary ban on foreign home buying as well. There are also various plans to build more affordable housing throughout the country although it is unclear how those homes will end up in the hands of end users who need them the most, that process isn’t transparent.

Prices around Canada for housing continue to be drastically detached from labor incomes.

The average earners in Vancouver and elsewhere in Canada aren’t making enough money to support these prices and to be buyers in this real estate market. One previous study suggested that in Vancouver you would need an income of roughly $127k or more to afford a condo, or more than $230k to afford a semi-detached home. The average income is far below that and so this situation is unsustainable and will only get worse if it isn’t addressed.

Housing affordability is one of the biggest issues for Canadians right now and a growing number of Canadians are giving up on the dream of owning a home because of the unaffordable options in the housing market. It is estimated that some 36% of young Canadian adults have given up on that idea of owning a home eventually, they won’t be able to come up with the down payment that’s necessary.

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For those Canadians who have been able to buy a home or condo for themselves it is because, for a significant portion of them, they had their parents help them to do it. Those home buyers needed parental help because they weren’t earning high enough incomes to afford it on their own or didn’t have the credit or down payment available.

36% getting help from parents to buy a home

One previous report on the issue of affordable housing in Canada suggests that as many as 36% of homebuyers got parental support on the transaction.

For a number of British Columbians who are struggling with affordability in this province they have already made the decision to look elsewhere. There might be new units going up on the market in coming months or years but isn’t clear in any way how that is going to change the situation and prices that we are seeing if it still isn’t enough to meet or surpass demand. It has been said that the Canadian housing market is overvalued for years now, that a correction might be coming or that the bubble might soon pop, but this continues to be the same message we’ve heard for years and we might still continue to hear it without anything significant changing on this front coming about.

Experts have suggested that bad policy has contributed to this problem and for that reason there is also the chance that even more bad policy introduced to try and fix it, could end up making it even worse, especially if there isn’t a clear understanding of how that policy helped create the current situation in the first place.