There are signs that Canada’s unprecedented housing market landscape is heading in the opposite direction.
Canada’s national median home price hit a record high in February at $816,620 — a 20 percent jump from the same time last year.
But it looks like February’s record may also represent a peak in the national average home price.
A new report by Robert Hogue of the Royal Bank of Canada warns of a dramatic “correction” in the market, where homes are selling significantly above asking prices, pricing out prospective home buyers.
Hogue’s report notes that the correction is just beginning, with home prices expected to reach lower levels than RBC expected earlier this year.
“We forecast home resales to fall almost 23% this year and 15% next year in Canada,” Hogue wrote in a July 22 release.
For Halifax realtor Richard Payne, the housing market outlook bodes well for single-income homebuyers.
“That was the biggest challenge for everyone,” he explained. If you’re only looking at one income, how can you afford a median-priced house in some of these larger markets across Canada, but specifically in Atlantic Canada?
Payne, in response to a new report by online company Zoocasa, which analyzed 20 Canadian housing markets to find the most affordable regions and property types for single-income buyers, said there is a huge influx of buyers buying properties across Atlantic Canada due to – above all – affordability.
He noted that while listings remain scarce, the next few months historically lead to an increase in homeowners putting up the for sale sign.
“A lot of the brokers that work with buyers, we’re crossing our fingers that we’ll see more inventory come out, which will make things a little bit easier because it won’t be you and 15 other people trying to buy the same house,” said he.”
Zoocasa’s research concludes that Regina, Saskatchewan is the most affordable city in the country for a one-income buyer with a median home price of $322,800. With the region’s median income nearly $10,000 higher than the income needed for a down payment on a house, it is financially feasible for people on one income to consider buying a home.
St. John’s, Newfoundland and Labrador, and St. John, New Brunswick, were not far behind.
One seaside town that didn’t make the top five was Halifax, where the average house sold for $536,000. With a median income of $49,000, it’s becoming increasingly difficult to find a one-income home in the region.
“We find the majority of buyers, unless you’re a first-time home buyer or a retiree who’s downsizing, are ideally looking for a single-family home, not necessarily an apartment,” he said, noting that housing affordability to it also largely depends on the type of home buyers are looking for.
“From a house price point of view, we’re seeing a leveling off in sales prices in the Halifax area, so it’s not that unusual now to get a house below asking price, which a year ago was pretty unheard of.”
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