In 1989 (The year of the Bubble) in the GTA, it took, on average, 55% of one’s gross annual income to buy a Toronto detached home..average sale price then was $274K. Interest rates were around 14%.
Today, it takes about 32% of your gross income to buy a detached house, average sale price is now $486K and purchasers can access a mortgage at an interest rate of 3.69% for a 4 year fixed term. The average Canadian Gross debt service ratio hovers around 30% which is astoundingly responsible considering all the media articles telling us how deeply in debt we are.
The great news so far is that Canadian unemployment is down to 7.6% and trending lower, and that economic growth is trending higher, incomes are too and are outpacing inflation and the Bank Of Canada looks as though they will not be raising rates any time soon. It looks to me as if Canadians, on the whole, are budgeting well and feeling very positive about economic and social conditions in this country. The city of Toronto is certainly a family’s dream city; full of parks, great schools, art, music and all the infrastructure that sets it apart from the rest of the “urban pack”…
Who wouldn’t want that!
It’s a great time to get in the market…so let’s go shopping!