Home Affordability a Struggle for Many Canadians
According to a Conference Board of Canada study based on 2007 Statistics Canada figures, one in five Canadians are struggling to afford the home they live in. The data suggests that many people are foregoing nutritious food and other health related expenses in order to pay for a roof over their heads.
With more recent studies finding that home affordability in Canada has worsened since 2007, for many homeowners the outcome is looking bleak. With homeownership costs expected to rise as demand for real estate outstrips supply, which in turn puts pressure on the cost of housing, home affordability is not expected to ease up anytime soon. Throw in the certainty of rising interest rates – which, by the way, have already started to rise ahead of the Bank of Canada’s predicted rate increase in the second half of 2010 – and you have a recipe for disaster for many Canadian families.
How the Numbers Break Down
The study from the Conference Board of Canada shows that in Canada:
- 75 per cent of people live in homes they can afford
- 5 per cent of people rely on government subsidization for their housing costs
- 20 per cent of people struggle to keep up with the housing payments.
Shockingly, 1.2 per cent of households spend more than 100 per cent of their income on keeping a roof over their heads. No wonder Canadians are so deeply in debt. I wouldn’t be surprised to find that with more recent figures that that number is higher.
While this study is not exclusively directed at homeowners, but at the whole population, it’s still disturbing. As the price of real estate and home ownership rises, so too will debt levels. Can a housing bubble really be that far away, if we’re not in one now?
