Early last month, RBC released its Housing Trends and Affordability report, which drove home once again that the cost of home ownership in Canada is continuing to climb.
The report points out that while housing demand has cooled considerably since the winter, a matching decline in homes available for sale has kept markets in Canada sufficiently tight to allow for modest increases.
In case you missed it, here are a few highlights (or a few lowlights, if you’re a glass half empty kind of person):
• The combination of higher home prices and mortgage rates have contributed to the increase by raising the monthly mortgage servicing charge on a typical home.
• At the national level, RBC Housing Affordability Measures rose for the fourth consecutive time, up between 1.1 and 2.1 percentage points.
• The deterioration in affordability over the past year has reversed the improvements achieved in 2008 and early 2009.
• Vancouver is still Canada’s most expensive market with its affordability measures very close to their all-time high.
• Ottawa, Montreal and areas in Saskatchewan are also showing poor affordability levels relative to their own historical track records, although none stick out when compared to the national average.
It’s easy to look at mortgage rates and say they are largely to blame for raising homeownership costs to such a worrisome level. But at some point we also to have to put the onus on ourselves in the real estate development industry. We need to at least try and build homes that people can afford.
In Vancouver, for example, developer Ian Gillespie is experimenting with affordable condos on the border of historic Gastown and the Eastside. Tossing aside the fancy finishes, parking stalls and over-the-top marketing, Gillespie is passing on the savings to consumers. The 108-unit project known as 60 W. Cordova is priced low enough that a couple earning minimum wage could afford to own.
Of course, this isn’t necessarily the right development for every city, nor should it be. And in no way is Gillespie some sort of saint devoted to helping the less fortunate. He is the developer behind the luxurious Shangri-La and the Fairmont Pacific Rim after all. But it’s so refreshing to witness someone experimenting at both ends of the spectrum. And clearly, in this market, it’s beneficial.
Prior to its advance sales date, which happened Saturday, October 30th, 60 W. Cordova was already oversubscribed.
If you have some more information on similar projects, take a moment to comment below. I’d love to hear more.