Home ownership is becoming less and less affordable in the National Capital Region as real estate prices and associated costs rise while average household incomes drop, according to the latest housing market assessment from Desjardins.
Desjardins’ quarterly affordability index assigns Ottawa-Gatineau’s real estate market a value of 1.26, a 3.5 per cent decline from the previous quarter and the lowest since the financial services company started tracking the stats 15 years ago.
The affordability index is derived from a series of values including household income and overall housing prices in a region.
The average Ottawa-Gatineau home sale price in the third quarter of 2021 came in at $558,896, a slight rise from the previous period. Home ownership costs, which include mortgage payments as well as property taxes and utilities, rose 1.6 per cent.
The average household income dropped 2.6 per cent over the same period, compounding the drop in affordability in the region.
Get weekly money news
Desjardins said drops in housing affordability were largely felt across the country, with Kingston, Toronto and Montreal also reporting affordability lows in Q3.
The Ottawa Real Estate Board (OREB) also said this week that home prices continued to climb in the city in October.
Residential-class properties sold at an average of $716,378 in the month, up 19 per cent from October 2020. The average condo sold for $404,760, up 10 per cent year over year.
OREB president Debra Wright said in a statement that while overall home buying activity returned to pre-pandemic norms in October, a lack of supply continues to put pressure on prices.
There’s currently a one-month supply of residential properties in Ottawa and a bit more than that when it comes to condo stock, she said.
The lack of available homes is making it harder for entry-level home buyers to break into the market, as existing homeowners are staying in place for longer.
“Low inventory and a lack of suitable housing options restrict movement along the housing spectrum. Move-up buyers and downsizers have nowhere to go, so they stay in place, but we need that exchange of properties in the marketplace to free up supply for entry-level homebuyers,” Wright said.
“The only way we will find balance in Ottawa’s market is to increase the housing stock exponentially.”
Comments