Property prices: the accessibility gap is widening in Montreal and Quebec

Property prices: accessibility gap widens in Montreal and Quebec

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While property prices have started to drop somewhat across Canada, their prices are still not becoming affordable for average households, particularly in the census metropolitan areas (CMAs) of Quebec and Montreal . 

That was according to the latest report from the Parliamentary Budget Officer (PBO), who released an update to his assessment of property prices on Thursday. in Canada.

The study looks at the price of properties in relation to the ability of households to borrow and to be able to pay for the purchase of a house.

“Nationally, the gap between the average price and the price that would be affordable by an average household fell from 45% in December 2021 to 67% in August 2022, a jump of 22 percentage points in just eight months. “, explained the parliamentary budget officer, Yves Giroux.

This increase is due to the rise in mortgage rates, according to Mr. Giroux, which would then have reduced the borrowing capacity of households.

Recall that the average national price of homes was estimated at a peak of $839,600 in February 2022, but fell 7% to reach $777,200 last August.

However, average home prices in the Montreal CMA were more than 50% above estimated affordable levels in August. Although less important, the trough also widened in the Quebec City CMA.

The PBO estimates that prices at the national level should however decrease by 12% to 23% from now. the end of 2022 compared to the highs observed at the beginning of the year.