- For 64 per cent of Canadians, relocation is among the top
sacrifice they'd be willing to make in order to afford a home;
however, half (50 per cent) agree that the farthest they would go
would be less than 100KM
-
- 56 per cent say that moving to a different
neighbourhood/community would be one of the top three sacrifices
they would make
- 38 per cent would make the sacrifice of moving to a different
city/province/region regardless of distance
- 38 per cent of Canadians define housing affordability as a home
they can afford that meets their basic needs, and includes some
liveability elements, such as green spaces and restaurants
- Based on average residential selling price, Brandon, MB ranked as the most affordable
market in 2022, replacing Winnipeg
which was most affordable in RE/MAX Canada's 2021 ranking. This is followed by
Regina, SK (which remained on the
list year-over-year), St. John's,
NL, Moncton, NB and
Red Deer, AB
- Based on the share of income spent on mortgage payments,
Red Deer, AB ranked as
Canada's most affordable market,
with 25.86% of average monthly income spent on the average-priced
home. This is followed by Regina,
SK (26.94%) and Brandon, MB
(27.73%) in Western Canada.
Eastern Canada's most affordable
regions to carry a mortgage include Thunder Bay, ON (29.78% of monthly income
spent on mortgage), followed by St.
John's, NL (31.45%) and Moncton,
NB (33.4%)
TORONTO and KELOWNA,
BC, July 20, 2022 /CNW/ -- RE/MAX®
Canada's 2022 Housing
Affordability Report reveals that 68 per cent of Canadians are
willing to make at least one sacrifice to buy a home they can
afford, according to a Leger survey commissioned by RE/MAX
Canada. The most common concession
is relocation, as identified by 64 per cent of survey respondents –
a trend that continues to reign as a primary influence in local
housing markets across the country, say RE/MAX brokers. This is
followed by 56 per cent indicating they would be willing to
sacrifice the type of home they purchased; purchasing a home under
co-ownership with family and friends, as identified by 29 per cent
of survey respondents; and renting a part of their home for
additional income, at 27 per cent.
![(PRNewsfoto/RE/MAX Canada) (PRNewsfoto/RE/MAX Canada)](https://mma.prnewswire.com/media/546366/REMAX_Logo.jpg)
According to the same Leger survey, 43 per cent of Canadians
said the high price of real estate in their area was a barrier to
entry into the market. This is up one per cent from last year.
Other hurdles include a higher cost of living (35 per cent); a
shortfall in salary (24 per cent, down two per cent from 2021);
market volatility (24 per cent); and rising interest rates (24 per
cent, up six per cent from 2021).
"Despite affordability challenges across the cost-of-living
spectrum, Canadians are still eager to engage in the housing market
– even if it means making some sacrifices in the short-term to
achieve affordable home ownership," says Christopher Alexander, President, RE/MAX
Canada.
RE/MAX Canada asked Canadians
to define what "housing affordability" means to them. Thirty-eight
per cent of survey respondents defined affordable housing as "a
home they can afford and meets their basic needs and includes some
of the liveability elements they like such as proximity to school;
or walkable neighbourhoods," to name a few.
"While we wait for governments to implement a national housing
strategy to boost Canada's supply
of affordable housing, in the short-term the market is
starting to cool and balance itself out, bringing some much-needed
relief from the sky-high prices that we experienced during much of
the pandemic. This trend is largely being driven by higher interest
rates," says Alexander.
Affordability Across
Canada
RE/MAX Canada brokers and
agents in 24 key markets across the country were asked to provide
their analysis on local market activity and housing affordability
trends for the first half of 2022.
Western
Canada
Across Western Canada,
competition from out-of-town or move-over buyers has put upward
pressure on home prices year-over-year. Double-digit year-over-year
price increases were noted in Kelowna/Central Okanagan, BC (+21.1% from
$778,657 in 2021 to $942,977 in 2022), Vancouver, BC (+19.69% from $1,097,000 in 2021 to $1,313,000 in 2022), Victoria, BC (+14.93% from $885,117 in 2021 to $1,017,292 in 2022), and Winnipeg, MB (+12.66% from $388,291 in 2021 to $437,460 in 2022). Meanwhile, more modest price
increases were seen in markets including Calgary, AB (+5.85% from $499,229 in 2021 to $528,440 in 2022), Edmonton, AB (+4.73% from $390,490 in 2021 to $408,961 in 2022), Red
Deer, AB (+3.24 % from $345,576 in 2021 to $356,779 in 2022), Regina, SK (+0.42% from $322,600 in 2021 to $323,950 in 2022), Brandon, MB (+1.75% from $304,929 in 2021 to $310,252 in 2022) and Saskatoon, SK (+1.45 from $368,079 in 2021 to $373,410 in 2022).
In regions such as Victoria,
BC, and Vancouver, BC, some
of the most significant factors impacting housing affordability
include the high cost of living, inflation, and the housing supply
shortage, which is being further compounded by new-home
construction delays. Some of these factors reign true as well in
regions such as Edmonton, AB,
where affordability challenges are being attributed to residential
construction delays; out-of-province/out-of-region buyers driving
up demand and prices; and rising interest rates. In Calgary, the primary factor has been rising
interest rates.
As buyers navigate high housing prices, some regions across
Western Canada are experiencing
trends such as properties being purchased as a primary residence
while also renting part of the home to supplement monthly mortgage
payments. The pooling of finances between friends and family has
continued to remain a trend, as noted by RE/MAX brokers in
Victoria, BC.
The most affordable neighbourhoods across Western Canada regions surveyed include:
- Victoria, BC – Sooke, Saanich West and View Royal
- Kelowna/Central Okanagan, BC –
Rutland, Glenrosa and Kelowna
North
- Edmonton, AB – Beverly/Beacon
Heights, Prince Rupert/Queen
Mary Park and Westwood
- Calgary, AB – Dover, Erinwoods
and Abbeydale
- Red Deer, AB – Vanier Woods, Sunnybrook South and Laredo
- Winnipeg, MB – Transcona, North
Kildonan and Riverbend
- Brandon, MB – Souris, Wawanesa and Rivers
- Saskatoon, SK – Riversdale,
King George and Casewell Hill
Ontario
Similar to Western Canada and
Atlantic Canada, some of the
smaller regions outside of Toronto/GTA have experienced some of the
highest year-over-year price increases in the first half of 2022,
due to rising demand and limited supply – Windsor, ON (+24.42% from $542,225 in 2021 to $674,637 in 2022), Barrie, ON (+24.40% from $767,004 in 2021 to $954,133 in 2022), Sudbury, ON (+23.85% from $402,855 in 2021 to $498,939 in 2022 ), London, ON (+23.26% from $632,302 in 2021 to $779,383 in 2022), Hamilton, ON (+22.35% from $775,742 in 2021 to $949,099 in 2022), Thunder Bay, ON (+17.58% from $315,321 in 2021 to $370,761 in 2022), Kingston, ON (+20.83% from $574,844 in 2021 to $694,576 in 2022), Ottawa, ON (+11.46% from $728,205 in 2021 to $811,653 in 2022). In Kitchener/Waterloo, ON, the increase was more
modest at +4.29% year-over-year from $759,115 in 2021 to $791,674 in 2022. Unsurprisingly in Toronto/GTA, year-over-year price increases
sit at +16.88% from $1,075,636 in
2021 to $1,257,257 in 2022.
Alternatives to traditional home ownership have also seen an
uptick in some Ontario regions, as
identified by RE/MAX brokers in Hamilton and Windsor. Some of the most significant factors
impacting housing affordability in Ontario, highlighted by brokers in
Windsor, Sudbury and Ottawa among others, include low or
diminishing housing supply, rising interest rates, cost of living
and inflation, out-of-province/out-of-region buyers, economic and
employment conditions.
The most affordable neighbourhoods across Ontario regions surveyed include:
- GTA, ON – Oshawa, Orangeville and Essa
- Hamilton, ON – Crown Point
North, Durand North and Central
South
- Kingston, ON – Kingscourt,
Henderson and Rideau Heights
- Thunder Bay, ON – Westfort,
Current River and East End
- London, ON – London East,
St. Thomas and South London
- Ottawa, ON – Rockland, Herongate/South Keys and Bells
Corners
- Sudbury, ON – Onaping Falls,
Capreol and Wahnapite
Atlantic
Canada
In Atlantic Canada,
Halifax has experienced
significant year-over-year price growth (+23.59% from $460,787 in 2021 to $569,475 in 2022) as a result of the move-over
buyers migrating to the region for its relative affordability. More
modest price increases were experienced in St. John's, NL (+6.23% from $313,364 in 2021 to $332,900 in 2022), Moncton, NB (+2.11 % from $331,003 in 2021 to $337,992 in 2022) and Charlottetown, PEI (+29.30% from $355,000 in 2021 to $459,000 in 2022).
Affordability in regions across Atlantic Canada, such as Halifax, St.
John's and Charlottetown,
has been impacted most by rising interest rates and inflation, low
housing supply, out-of-province/out-of-region buyers, the return of
immigration, and insufficient new-home construction further
impacting growing demand.
The most affordable neighbourhoods across Atlantic Canada regions surveyed include:
- Halifax, NS – Lower Sackville, Eastern Passage and Fairview
- St. John's, NL – Paradise, Conception
Bay South and Portugal Cove St.
Philips
- Charlottetown, P.E.I –
Summerside, Rural and Cornwall
- Moncton, NB – Moncton Centre,
Moncton East and Riverview West
Interest Rate Effect
The record-low interest rates that first appeared in 2020 and
continued throughout 2021 presented an exceptional opportunity for
Canadians to enter or move up in the housing market. However, they
also added fuel to an already hot market. With inflation at a
40-year high and interest rates rising, the housing market is
starting to cool. In late 2021, RE/MAX Canada had anticipated steady price growth for
the year ahead, with an estimated 9.2 per cent increase in average
residential sale prices across the country for 2022. Currently,
with the exception of Hamilton,
Ontario, price growth appears to be easing – a trend that
is expected to continue through the remainder of 2022, with growth
likely to occur in the single digits, and some markets expected to
experience a modest decline.
"Despite current economic conditions, rising interest rates
are not the biggest factor impacting housing affordability," says
Benjamin Tal, Deputy Chief
Economist, CIBC. "Instead, it's the pace at which interest rates
increase that poses a greater risk to the housing market
and economy in the short-term. In the long-run, factors such
as rising immigration levels putting further strain on demand,
limited housing supply, supply chain hold-ups, and the shortage of
skilled labourers will be the greatest hurdles in overcoming
Canada's housing affordability
crisis. These must all be addressed in order to help balance
supply."
Adds Elton Ash, Executive Vice
President, RE/MAX Canada, "The
shifts we are seeing in the housing market, with prices starting to
ease across the country in tandem with softening demand and sales,
are an overdue adjustment. A healthy housing market is
characterized by price appreciation in the mid- to high-single
digits, and many markets across Canada are re-entering that comfort
zone."
Based on broker insights and external data, as indicated within
the accompanying RE/MAX Canada Housing Affordability Index, the
average monthly mortgage amount across Canada ranges from approximately $1,492 to $6,314.
Depending on regional income levels and with a 20-per-cent down
payment, this accounts for anywhere from 25.86 to 112.25 per cent
of Canadians' monthly income. According to the Leger survey, 18 per
cent of Canadians define housing affordability as allocating only
30 to 40 per cent of their monthly household income toward housing
costs, including mortgage payments, property taxes and other
housing-related expenses.
Thus, concern over the ability to afford a home remains among
Canadians. Sixty-eight per cent of survey respondents agree that
they can't afford to buy a home in the neighbourhood/region they
choose in the next six months; 64 per cent say that eroding housing
affordability is making them less confident in their ability to
purchase a home; and 63 per cent express that rising interest rates
are prompting them to put their home-buying plans on hold for the
foreseeable future. Unsurprisingly, the majority of Canadians (70
per cent) agree that Canada needs
a national housing strategy to solve the housing crisis. This
number is up 10 per cent from last year.
Additional highlight from the 2022
RE/MAX Canada Housing Affordability Report:
- Given the possibility of recession, 57 per cent of Canadians
have decided to wait to purchase/sell their home
About the 2022 RE/MAX Canada
Housing Affordability Report
The 2022 RE/MAX Canada Housing Affordability Report includes
data and insights from RE/MAX brokerages. RE/MAX brokers and agents
are surveyed on market activity and local developments. Average
sale price is reflective of all property types in a region and
varies depending on the region.
Regional summaries with additional broker insights can be found
at RE/MAX.ca.
About Leger
Leger is the largest Canadian-owned full-service market research
firm. An online survey of 1,529 Canadians was completed
between June 24-26, 2022, using
Leger's online panel. Leger's online panel has approximately
400,000 members nationally and has a retention rate of 90 per cent.
A probability sample of the same size would yield a margin of error
of +/- 2.5 per cent, 19 times out of 20.
About the RE/MAX Network
As one of the leading global real estate franchisors, RE/MAX,
LLC is a subsidiary of RE/MAX Holdings (NYSE: RMAX) with more than
140,000 agents in almost 9,000 offices with a presence in more than
110 countries and territories. RE/MAX Canada refers to RE/MAX of Western Canada (1998), LLC and RE/MAX
Ontario-Atlantic Canada, Inc., and RE/MAX Promotions,
Inc., each of which are affiliates of RE/MAX, LLC. Nobody in the
world sells more real estate than RE/MAX, as measured by
residential transaction sides.
RE/MAX was founded in 1973 by Dave and
Gail Liniger, with an innovative, entrepreneurial culture
affording its agents and franchisees the flexibility to operate
their businesses with great independence. RE/MAX agents have lived,
worked and served in their local communities for decades, raising
millions of dollars every year for Children's Miracle Network
Hospitals® and other charities. To learn more about RE/MAX, to
search home listings or find an agent in your community, please
visit remax.ca. For the latest news from RE/MAX Canada, please visit blog.remax.ca.
Forward looking
statements
This report includes "forward-looking statements" within
the meaning of the "safe harbour" provisions of the United States
Private Securities Litigation Reform Act of 1995. Forward-looking
statements may be identified by the use of words such as "believe,"
"intend," "expect," "estimate," "plan," "outlook," "project," and
other similar words and expressions that predict or indicate future
events or trends that are not statements of historical matters.
These forward-looking statements include statements regarding
housing market conditions and the Company's results of operations,
performance and growth. Forward-looking statements should not be
read as guarantees of future performance or results.
Forward-looking statements are based on information available at
the time those statements are made and/or management's good faith
belief as of that time with respect to future events and are
subject to risks and uncertainties that could cause actual
performance or results to differ materially from those expressed in
or suggested by the forward-looking statements. These risks and
uncertainties include (1) the global COVID-19 pandemic, which has
impacted the Company and continues to pose significant and
widespread risks to the Company's business, the Company's ability
to successfully close the anticipated reacquisition and to
integrate the reacquired regions into its business, (3) changes in
the real estate market or interest rates and availability of
financing, (4) changes in business and economic activity in
general, (5) the Company's ability to attract and retain quality
franchisees, (6) the Company's franchisees' ability to recruit and
retain real estate agents and mortgage loan originators, (7)
changes in laws and regulations, (8) the Company's ability to
enhance, market, and protect the RE/MAX and Motto Mortgage brands,
(9) the Company's ability to implement its technology initiatives,
and (10) fluctuations in foreign currency exchange rates, and those
risks and uncertainties described in the sections entitled "Risk
Factors" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the most recent Annual
Report on Form 10-K and Quarterly Reports on Form 10-Q filed with
the Securities and Exchange Commission ("SEC") and similar
disclosures in subsequent periodic and current reports filed with
the SEC, which are available on the investor relations page of the
Company's website at www.remax.com and on the SEC website at
www.sec.gov. Readers are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date on
which they are made. Except as required by law, the Company does
not intend, and undertakes no duty, to update this information to
reflect future events or circumstances.
SOURCE RE/MAX Canada