Two-thirds of Canadians can't comfortably afford mortgage above $1,700: survey

Homeownership out of reach for many Canadians CTV’s Todd Battis interviews mortgage broke Andy Hill about survey that shows many Canadians can’t afford an average mortgage.

A new report looking into homeownership affordability reveals an unsettling picture on how far out of reach owning a home is becoming in Canada.

The survey from Leger shows 67 per cent of Canadians can’t comfortably afford their monthly housing costs above $1,749 per month.

“Comfortably means what people really want versus maybe what they specifically have on the books. But it does show that the average mortgage size at these rates that people want to carry is about $350,000 across the country, and for Atlantic Canada, that would be about $225,000,” said Andy Hill, licensed mortgage broker and co-founder of EveryRate.ca.

“Which given the appreciation of homes, there’s a pretty big delta difference between those two things right now.”

Those numbers may be disturbing for some, considering the average monthly mortgage payment sits just over $1,800.

When those surveyed were asked the maximum amount they can afford for housing each month:

The survey also revealed 42 per cent of households earning more than $100,000 a year are feeling the pinch, with nearly half struggling to afford anything over $1,749 per month.

“Which I thought was pretty staggering because that wage income earner could support probably up to $450,000 in mortgage or more depending on if it’s dual income, and 42 per cent of them are saying they don’t want more than $350,000,” Hill said.

Hill admits the general cost of living – like food, heating and other everyday expenses – likely does have a factor when it comes to the outcome of what’s a comfortable mortgage amount to pay each month.

“Property taxes have gone up, maintenance for property has gone up and average daily expenses has gone up dramatically since the pandemic. So have individuals’ expectations maybe reset a little bit after this inflation? I think that was one of the things that when we see these big global changes amongst everything, they’re almost like scars and wounds and people change maybe the risk that they take on property, or the monthly liability risk has changed for Canadians,” said Hill.

In Halifax, the poll shows the average starter home price is just over $505,000, which carries a monthly mortgage around $2,600. That’s 48 per cent higher than the monthly mortgage those surveyed said they would be able to comfortably pay, which was $1,140.

Hill says wages and home prices have been disconnected for a long time in some of the major markets, like Halifax.

“Halifax, since the pandemic, has really got there. But in Vancouver or Toronto, housing and income have really disconnected, and I don’t know what the answer is,” he said.

“I mean, we’re not building enough homes and we’re only expanding as a population.”

Hill says he believes the only fix to this is for wages to increase across the country.

“I mean, you look at a country like Australia and for years and years, that minimum wage has been so far ahead of other countries and they’ve made it work, and inherently, individuals have been able to afford more property,” said Hill.

“I feel like wage inflation might be one of the only answers to solving this because I don’t see a world where we’re building property product that the values can correct enough to make up that delta difference.”