Property statistics Canada

20 March 2019

Whether you’re a first home buyer, looking to buy a second property or possibly downsizing ahead of retirement – it’s always a good idea to read up on the market before signing on the dotted line. We’ve compiled stats from some of the country’s leading housing data resources to save you the legwork.

Overview of the property market

Canadian household debt

In January 2019 the Bank of Canada reported the total household debt for residential mortgages amounted to $1.55 trillion. When you take into account all household debt – including consumer credit – this figure balloons to $2.16 trillion.

The cost of buying

The Canadian property market dropped by 0.52% from December 2018 to January 2019, after five years of consistent growth in property prices. The cost of a typical Canadian property is $613,500, according to the House Price Index from the Canadian Real Estate Association (CREA).

In the Greater Toronto area, the benchmark price is upwards of $760,000, while in the Greater Vancouver area, the cost of a home is $1,019,600. Cheaper property markets include the Greater Moncton area at just $178,500, and Edmonton at $317,200.

The cost of renting

The Canadian Mortgage and Housing Corporation (CMHC) reports the costs of ownership have increased, while the cost of renting has fallen. The costs of owned accommodation has risen slightly in the past year by 2.1%, while the cost of rental accommodation fell in the same period by 0.7%.

Housing affordability

While the cost of Canadian properties has seen a slight decline, they’re still well out of reach for many Canadian families. According to data from the Royal Bank of Canada (RBC), the share of income a household would need to cover home ownership costs in Canada is 53.9%, though it varies by region. In Vancouver, the proportion necessary is 86.9%, in Toronto 75.3%, and in Montreal 45.2%. More affordable cities include Edmonton (28.2%) and Ottawa (34.2%).

The proportion of household debt to household income has risen steadily since the mid 1990s to its current rate of 181% (OECD).

Interestingly, the United States and Canada held similar proportions of debt up until the 2008-2009 recession. Since then, the proportion has consistently fallen in the United States, while it’s increased in Canada over the same period.

The cost of city living

According to Finder research on the cost of city living, Canadians can save a solid 33% by purchasing a home out of the city centre. However the price difference varies considerably depending on what city you’re buying in.

For the more expensive housing markets in Toronto and Vancouver, potential home buyers can save 20% and 24%, respectively.

Those in Halifax can make the biggest savings by purchasing a home further out, with the cost of a suburban property just half the cost of one in the city (51%). However, those in London, Ontario won’t save as much, with the cost of properties outside the London CBD around 12% cheaper than the city.

The cost of property in the city versus the suburbs

CityPrice per square meter in the city (CAD)Price per square meter outside the city centre (CAD)Percentage difference (%)
London, Ontario$2,270$2,009-12%
Windsor, Ontario$4,306$3,498-19%
Winnipeg, Manitoba$3,024$2,448-19%
Hamilton, Ontario$4,511$3,634-19%
Toronto, Ontario$10,280$8,221-20%
Vancouver, British Columbia$11,650$8,859-24%
Edmonton, Alberta$3,328$2,520-24%
Quebec City, Quebec$2,652$1,983-25%
Kitchener–Waterloo–Cambridge, Ontario$3,401$2,519-26%
Oshawa, Ontario$3,095$2,193-29%
Victoria, British Columbia$5,679$3,924-31%
Calgary, Alberta$5,099$3,312-35%
Montreal, Quebec$5,248$3,230-38%
Ottawa–Gatineau, Ontario/Quebec$4,655$2,674-43%
Halifax, Nova Scotia$4,926$2,415-51%

What should the government do to make housing more affordable?

In Finder’s March BoC Overnight Rate report, five economists suggested the government should relax zoning restrictions and/or reduce regulations.

Other panellists suggested the government should ease the stress test rules, improve the entitling process and maintain or possibly increase the tax on speculators.

Just under half (45%) of panellists believe the B-20 mortgage stress test rules are “just right”, with 27% saying they’re “not severe enough” and 18% saying they’re “too severe”.

Comments from Finder’s Bank of Canada report

  • Sebastien Lavoie, Chief Economist at Laurentian Bank: “Governments need to improve incentives to make the construction of rental appealing for builders located in Vancouver and Toronto where the cost of land is an issue.”
  • Carl Gomez, Senior Vice President, Research & Strategy at QuadReal Property Group: “Local area government need to help unlock supply by improving the entitling process. Regional land use planning systems should also pay more attention to the necessity of having ample ‘shovel ready’ sites in inventory to accommodate the demand for a range of new housing types and locations.”
  • Moshe Lander, Professor of Economics at Concordia University: “If the government wants to address housing affordability, the easiest place to start is to ease up on zoning laws that make it hard for home builders to respond to high housing prices.”

Factors impacting the housing market

Mortgage stress test rules

New mortgage stress test rules were introduced by the Canadian Government in January 2018, which means all Canadian home buyers need to pass a stress test before buying a home – even those with a deposit of 20% or higher.

What are the new stress test rules?

The new rules require all federally regulated financial institutions to assess uninsured applicants based on either the Bank of Canada’s five-year benchmark rate, or the rate offered by the bank plus two percentage points – whichever is higher. Insured applicants (those with a down payment of less than 20%) are assessed based on the higher rate of either the benchmark rate, or the rate offered by the bank – without adding the extra 2%.

How do the new rules affect the mortgage market?

While the rules are intended to protect the Canadian housing market, there have been consequences for the mortgage market. According to data from the Bank of Canada, the number of new highly indebted borrowers has fallen – with the percentage of high-ratio mortgages (those with a down payment of less than 20%) dropping from 20% in the fourth quarter of 2016 to 6% in the second quarter of 2018. Overall, mortgage activity has significantly slowed.

What do economists think of the stress test rules?

In March 2019, Finder panelled 11 economists on what they thought of the B-20 mortgage stress test rules. The majority of panellists (45%) believe the B-20 mortgage stress test rules are “just right”, suggesting the rules are accomplishing what they were intended for. A further 27% say they’re “not severe enough” and 18% say they’re “too severe”.

The overnight rate and mortgages

The Bank of Canada meets eight times per year to set the target for the overnight rate, otherwise known as the Bank’s “policy interest rate”. This is the rate at which major financial institutions borrow and lend to one another in the overnight market. Changes to the overnight rate affect other interest rates, including mortgage rates.

Read about what economists are predicting the next interest rate move will be at Finder’s overnight rate report.

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Susannah Binsted
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