Brokers scoff at affordability

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Brokers aren't sold on a big bank report purporting more affordability in the housing market.

"Home ownership more affordable? Maybe for the RBC economist who wrote this nonsense. Nothing more further from the truth," John Martin wrote in the comments section of MortgageBrokerNews.ca. "Many people are struggling. Love how these people are able to predict things six months and some times years in to the future. Much like the weather reports. Which are very seldom right."

His comment follows a report by RBC Economics that states owning a home in Canada was more affordable in the third quarter of this yea. While property prices have continued to rise in many areas there has also been a rise in income. At the same time utility bills have been cut and interest rates have stayed low. The bank’s report also shows that resales continued to increase in October with Calgary, Toronto and Vancouver driving the rise; elsewhere resales have been flat or slightly lower.

In the mortgage market RBC says there was a reduction in fixed rates earlier in the year which has added to confidence. The report does come with a warning that next year is likely to see a reversal of affordability as interest rates inevitably rise.

"It's interesting that the article mentions a warning of interest rates rising next year," Mitch Thibodeau wrote. "Experts/Economists have been saying this for the last 4 years and we have yet to see rates rise. It's hard to know what to believe anymore."
  • John Martin on 2014-11-27 9:32:12 AM

    Home ownership more affordable?? Maybe for the RBC economist who wrote this nonsense. Nothing more further from the truth. Many people are struggling. Love how these people are able to predict things six months and some times years in to the future. Much like the weather reports. Which are very seldom right. Economists ?

  • Mitch Thibodeau on 2014-11-27 10:10:38 AM

    It's interesting that the article mentions a warning of interest rates rising next year. Experts/Economists have been saying this for the last 4 years and we have yet to see rates rise. It's hard to know what to believe anymore.

  • Dustan Woodhouse on 2014-11-30 3:43:05 PM

    The statement made is not that housing is 'afforable' but tht it is 'more affordable', i.e. the carrying costs of home ownership relative to income are statistically better than the year before. The difference is small, and in any event reaction to such headlines is always anecdotal based upon the lens of the readers own personal circumstances.
    I have heard two mantra's from the media all my homeowning life.
    1. Rates cannot get any lower - 8%+ in 1994 was seen as something to lock into long term - Wow, under 10%, very exciting times.
    2. Home Prices cannot get any higher. $160,000 for a detached home 30 minutes from downtown Vancouver?!?! Are you sure, seems like a bubble...
    Same old stories, same old realities.
    The cost of owning a home will rise in the future, as will the purchase price.

    Interest rates...I think still some time before the broken records of the past 20 yrs are accurate.

  • Mortgage Guy Geoff on 2014-12-01 9:09:39 AM

    Perfectly said Dustan. Like Yogi Berra said "its like Deja Vu all over again."

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