Although property prices have started to drop somewhat across Canada, they are not becoming accessible to average households, particularly in the census metropolitan areas (CMAs) of Quebec and Montreal.
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That’s according to the most recent report from the Parliamentary Budget Officer (PBO), who released an update on his assessment of property prices in Canada on Thursday.
The study examines the price of properties in relation to the ability of households to borrow and buy a house.
“Nationally, the gap between the average price and the price that would be affordable for an average household grew from 45% in December 2021 to 67% in August 2022, a jump of 22 percentage points in just eight months. “, explained the PBO, Yves Giroux.
This increase would be due to the rise in mortgage rates, which would have reduced the borrowing capacity of households, according to Mr. Giroux.
Recall that the average national price of residences was estimated at a peak of $839,600 in February 2022, but that it fell by 7% to reach $777,200 last August.
However, average home prices in the Montreal CMA were more than 50% above estimated affordable levels in August. Although less significant, the gap also widened in the Québec City CMA.
The PBO estimates that prices nationally, however, should see a decrease of 12% to 23% by the end of the year 2022 compared to the peaks seen at the beginning of the year.