Canadian tenants who dream of becoming owners must be patient. According to a recent study, the products are either too expensive, as in Ontario, or unavailable, as in Quebec.
In fact, it is only in the Canadian Prairies that aspiring renters have both the means to acquire an entry-level home and a certain selection of affordable products available for resale.
In Canada, renters simply cannot afford an entry-level property in 36 of the 50 cities surveyed, according to Point2, a real estate search portal, owned by Yardi Systems, a software company with 8,500 employees. .
It was impossible to speak with the author of the study Andra Hopulelen at Point2, who only accepted written questions.
Point2 is linked to Point2Homes, a real estate agency present in particular in Atlantic Canada, indicates Pierre Leduc, media manager at the Canadian Real Estate Association.
In Toronto, Vancouver and Richmond, as well as 11 other Ontario cities, renters have less than 60% of the income required to afford a first home.
The calculations were made on the basis of an effort rate equivalent to 30% of the income of the tenant household, a down payment corresponding to 20% of the purchase price and a fixed rate mortgage of 5 .75% amortized over 25 years.
The price of a first-time buyer property was set at 50% of the Canadian Real Estate Association’s April 2023 MLS Property Price Index (MLS PPI) value for the cities analyzed. In Quebec, in the absence of a similar index, Point2 used the median MLS price by weighting the house and condo categories according to their relative importance.
According to Point2, Quebec tenants generally have the financial means to acquire a first property. This is the case for 8 of the 10 cities in the province under study. Montreal and, to a lesser extent, Gatineau are the exceptions.
That said, it is not easier for first-time buyers in Quebec, since there is a lack of products to sell in the cheapest price ranges.
“The share of entry-level housing is close to 3% in two large cities (Quebec and Terrebonne), while the other 8 cities show shares of only 1% and 2%”, writes the specialized media.
On the Centris website. ca, there are 69 properties for sale at less than $160,000 in the Quebec region, mainly studios and condos.
In Terrebonne, only 9 properties are priced below $225,000 out of 300 properties for sale. Affordable products are almost only mobile homes.
“In the Quebec region in 2018, there was an average of 670 houses for sale at a price of less than $200,000. This represented 14% of all homes for sale. In 2022, there were only 64 houses left in this price range on average over the whole year, for a market share of only 4%, “says Stéphanie Lapierre, principal economist of the Professional Association. Quebec real estate brokers (APCIQ).
In the summer of 2023, the Prairies are the best place in the country to access property, according to the Point2 study. In Calgary, Edmonton, Saskatoon, Regina and Winnipeg, renters can afford an entry-level property and those on the market represent at least 10% of all properties for sale right now.
