This story may actually give you some hope if you’ve been watching the Canadian housing market, waiting for your chance.
The National Bank of Canada’s measurement on home affordability fell 0.2 points in 2017’s final quarter. This may not seem like a big slip, but it means that “an average mortgage on a representative home was slightly cheaper than it was a quarter earlier,” says Huffington Post.
The last time this happened was during 2015’s second quarter. The slight decrease is being attributed to falling house prices in the GTA over the past year and strong wage gains brought by the heightening job market in 2017.
“‘The countrywide fourth-quarter wage growth of 5.7 per cent annualized was the strongest in more than three years,’ National Bank economists Matthieu Arseneau and Kyle Dahms wrote.”
In order for this affordability to continue to scale, strong wage growth is going to have to continue as well; there are other simultaneous factors that help make housing unaffordable, too.
Those recent interest rate hikes contribute to rising mortgage rates. Over the last 6 months, mortgage rates have gone up over half a percentage point.
“‘The most expensive markets such as Toronto and Vancouver are the most sensitive to interest rate hikes," they wrote.
‘In Toronto, the rate rise combined with the tax on foreign purchases seems to have suppressed demand. Prices were down in Q4 and are likely to continue falling in 2018.’”
If wages continue to grow, Toronto and Vancouver could continue to become more affordable as the year progresses.