Wednesday, September 09, 2009

Housing affordability improves

Until this recession housing prices where slowly and steadily creeping out of the territory of affordable for many first time buyers.

The truest example of this was a "starter home" in Vancouver for $700,000. Of course location and other market comparables would set aside this property from the rest, it's still not in my idea of the starter home region. Vancouver's housing affordability is still an unbelievable 63%. That means 63% of income must be devoted to mortgage payments.

Now we now why Vancouverites are so svelte - they can't afford food!

Housing prices cooled and low interest rates brought back affordability but how long will it last? According to some experts not so long.

"The two major contributors to the significant improvement during the past year or so — the decline in mortgage rates and the drift down in prices — appear to have reached turning points."

"Supply of properties for sale is dropping as demand bounces back, which is working to heat up prices again in many parts of the country."

RBC senior economist Robert Hogue

We are in a one-of-a-kind situation to pick up great properties with low interest rates at incredible prices. There is such demand in Canada and especially in Edmonton, Alberta for quality housing, price increases are going to return in the next year.

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