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Canada’s housing supply has reached record lows in the first three months of this year, a new report has found. National Bank of Canada’s Housing Affordability Monitor report revealed that its metric for housing supply was below the previous record low set in the late 2000s by a wide margin in the first quarter of 2024.
The metric, which is a ratio of working-age population versus housing starts, began its plunge in early 2022 when demand surged and interest rates began their ascent.
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Despite the record low for supply in Canada, National Bank’s report found silver linings for affordability in Canada. Most markets saw declines in mortgage payments as a percentage of income, the report stated.
The rise in affordability was largely due to the decrease in five-year, fixed-mortgage rates. That was the largest decline since the third quarter of 2022, mostly a result of lenders anticipating a drop in the Bank of Canada overnight rate this year at some point.
Overall, the mortgage payment as a percentage of median pre-tax income was 58.9 per cent as of March 31, up slightly from the same period last year.
In Calgary, the metric was 44.8 per cent, up 3.9 percentage points from the first quarter of 2023.
The highest percentage was in Vancouver at 95.7 per cent, up nearly two percentage points from the same span last year. There, buyers required an annual income of more than $260,000 to qualify for a mortgage at the end of this past March, the study found. That’s despite the median income in Vancouver being about $90,000.
In contrast, the qualifying annual income in Calgary for a mortgage was about $150,000, while the median income was about $94,000.
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