Can you afford a new house?

1. Posted by Mr on Tue, Jul 28, 2009

Canada's real estate market began cooling off in the second half of 2008 and the statistics coming out in the first few months of 2009 strongly suggest the trend will continue. According to figures released by the Canadian Real Estate Association , sales of existing homes fell by 17.1 per cent across the country in 2008 and are expected to tumble another 16.9 per cent in 2009. The association says resale home prices fell by an average of 9.6 per cent across the country in February 2009 compared to February 2008. Meanwhile, Statistics Canada reported that prices for new homes dropped by 0.8 per cent between January 2008 and January 2009. That's the first year-over-year decrease since 1997. Doesn't look good from were I stand so sell now or lose it all.......

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2. Posted by Joanna on Tue, Jul 28, 2009

The sooner we accept the Canadian housing market has been overcooked and needs to adjust, the better, not least because mapping out the future requires an understanding of what has happened. Canadian politicians need to accept the bursting of the property bubble as an economic coming of age and play their part in adjusting downwards expectations of wealth, wage and inflation. They must begin to focus on where we would like to be in 10 years, and not just in 10 months. The biggest mistake policymakers and politicians could make at this stage is to continue propping up the asset bubble in the property market. (30, 35, 40 year mortgages/No money down mortgages/ridiculously low interest rates/etc….) And don’t believe the housing market in Canada has improved at all. That’s just realtors and realestate related machines trying to create false hope and predictions for the future. Affordability index spells it out loud and clear. Canadians can not afford housing any more and prices will crash. That’s a fact!

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3. Posted by MetisCnd on Tue, Jul 28, 2009

The collapse of the housing market in the States has exposed the vulnerable balance sheets of many Americans. They are debt rich and asset poor. You can talk favorable demographics all you like. But the fundamental question for any housing decision is whether a borrower can make his mortgage payment. That's getting to be an expensive proposition here in Canada. There hasn't been a house price crash here, like the ones unfolding in America and Britain……YET! But affordability in the Canadian housing market is clearly a problem. Of 227 cities surveyed, found 9 Canadian cities in the top 50 of "least affordable" in the world. "There are no affordable [housing] markets in Canada and there are no moderately unaffordable markets. Five of the nine markets are rated severely unaffordable." “All of the large capital cities (Vancouver, Victoria, Calgary, Edmonton, and Toronto) are rated severely unaffordable”. Vancouver rated 8th out of 227 cities surveyed with a marginal difference between 1st and 8th place. The best ratings are seriously unaffordable in four smaller markets Saskatoon, Regina, Winnipeg, and Halifax.

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