Housing affordability shows biggest improvement in nearly 5 years in Q1. Why?
A “trifecta” of conditions in Canada’s housing market last quarter translated into the biggest improvement in affordability since 2019, National Bank of Canada said Thursday.
The institution’s Housing Affordability Monitor showed “widespread” improvement in each of the 10 largest markets it tracks. National Bank gauges housing affordability by tracking the mortgage payment as a percentage of income for the median home price.
This statistic fell 3.1 percentage points to 58.9 per cent in the first quarter of 2024, marking the largest quarter-to-quarter improvement since Q2 of 2019.
That came after the bank’s affordability monitor stood at its worst levels since the 1980s to the end of 2023.
National Bank said the “greatest” improvement was seen in Canada’s three least affordable housing markets of Toronto, Vancouver and Victoria, thanks to relatively steeper drops in home prices in the quarter.
Mortgage payments as a percentage of income dropped 5.7 percentage points to 84.4 per cent for non-condo properties in Toronto last quarter and declined 2.7 percentage points to 50.2 per cent for condos. Vancouver had even steeper drops of 8.9 points and 3.8 points for non-condo and condo properties, respectively.
Pritesh Parekh, Toronto-based Realtor with Century 21, tells Global News that there hasn’t been the typical run-up in prices locally that many market watchers typically expect ahead of the spring housing season. As a result, he says some buyers who were gearing up for a purchase in the first quarter of the year may have been able to get the home they were looking for at the right price.
“It worked out for a few people who were ready to pull the trigger,” he says.
The boost in housing affordability was driven by a
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