Buying a home or finding an affordable rental is becoming more of a challenge both in Canada and the US.
But are housing costs more overwhelming here or south of the border?
That was the question at the core of a new study by Point 2 Homes. This week, the results of that study were released. The results may surprise you.
The study found that on this side of the border, Canadians must pay, on average, “a staggering 56% more to own a home, and 25% more to rent compared to a decade ago.” This is compounded by the fact that the country’s median income only went up by 15%.
Americans, on the other hand, saw the average home price in the country increase at a much slower rate (24%), while the median income went up by 18%.
Side-by-side, the Canadian housing market went from “seriously unaffordable” to “severely unaffordable,” while the American real estate sector maintained its position in the “seriously unaffordable” category.
Of course, the alternative to homeownership is renting. But here in Canada, that may not be much of a comfort either. In Canada, the average amount went up 25% in ten years, which, while it was a bigger increase, was a similar trajectory to the US, where rental rates in the same time period rose by 23%.
However, the report notes, not all cities – whether Canadian or American – are created equal.
A previous study by Point 2 Homes study found that housing affordability varies wildly in Canada and the US from province to province and state to state, but it’s mostly individual markets in both countries that are pushing these rates higher and higher.
According to RENTCafé.com, renters in Manhattan see a rent of $4,119 USD, and even in Brooklyn, they face average rents of $2,801 USD. Four other cities post average rents above $3,000 USD: San Francisco, CA ($3,590 USD), Boston, MA ($3,379 USD), San Mateo, CA ($3,234 USD), and Cambridge, MA ($3,112 USD).
Here in Canada, it’s no surprise that Vancouver and Toronto still see the highest=priced rentals across the board, with rent in both cities hovering around $2,000 CAD.
And while the “the future direction of Canada’s housing market is difficult to forecast, there is no doubt that both homebuyers and renters north of the border face tighter conditions than their neighbours to the south,” the report said.
Point 2 Homes said the findings in the report are based on research into the real estate metrics from 2008 and 2018 and put together a side-by-side comparison to determine which country has it worse.