Toronto Housing Affordability Increases: Report
A new report released by the Royal Bank of Canada says that housing affordability in the GTA has improved after declining severely for four straight quarters.
The Royal Bank of Canada report said that it predicts the Bank of Canada will increase rates starting in the second quarter of 2011. Despite this, average household income is also expected to increase by the same time.
Low mortgage rates to thank for increased affordability in Toronto
Low mortgage rates have led to the Toronto market’s “soft landing” after the huge increase in home sales seen earlier this year because of the impending Harmonized Sales Tax and changes in mortgage lending rules, making them stricter.
“Although triggering a fair amount of anxiety while it unfolded, the Toronto area market’s return to earth this spring was, in retrospect, a mostly benign affair,” said the report, “the fears were that the payback for the clearly unsustainable record high levels of existing home sales at the start of the year would be an all out rout.”
The lower the number on the Housing Affordability Index, the more affordable a home is considered. Toronto Housing affordability earlier this year was 60, and now it’s rated a 56.1 according to the report.