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Canada’s main real estate market reported last month’s sales, and the figures are not satisfactory. Toronto and Vancouver both reported sharp declines in sales and prices. Other large markets are also starting to show signs of decline.
At the same time, rents are up 19% from last year amid the recent decline in house prices in Greater Toronto. In some cities, the monthly payment for buying a house is lower than the monthly rent, according to a report.
According to CBC, the rental market is also facing more pressure in the current environment of sharp cooling in the housing market. The collective surge in rents across the country has made many people find that their housing budgets are far from adequate.
Average rents in Canada rose again after a decline caused by pandemics in 2020 and 2021, according to the latest Rentals.ca data.
In the second quarter of 2022, the median rent for all Rentals.ca listings, including detached houses, semi-detached houses, townhouses, condos, rental apartments and basement apartments, was C $1750, an increase of 7 per cent over the same period last year.
Among the reasons for the sharp rise in rents is that some renters suspended their purchase plans because they could not afford it after the central bank raised interest rates.
Potential buyers are waiting for house prices to fall further in the autumn as interest rates continue to rise, while sellers are waiting for the market to work in their favor again. Some sellers have even stopped listing their homes and turned to take advantage of the hot rental market. As a result, the vacancy rate of houses has been falling recently, and rental prices are also rising.
Among them, BC province is still the most expensive place in Canada.
Three of the top 10 cities with the most expensive rents are in BC province: Vancouver, Bennabi and Victoria. Among them, the price of an one-bedroom suite in Victoria rose 13.4% year on year to C $1870 in May 2022, while the price of a two-bedroom suite reached C $2896, ranking ninth in Canada.
However, after comparing the monthly mortgage and rent, it is found that in some areas, if according to a certain premise of buying a house, the monthly payment is lower than the rent.
A report from Zoocasa, for example, compares monthly payments and monthly rents for apartments in most areas. Suppose people pay 20% of the down payment, repay the loan for 30 years, and choose a fixed interest rate of 5 years (at 4.49%). As can be seen from this statistical table, if there is sufficient down payment and loan repayment ability, then the monthly payment in Missouri Saga and Oshahua is less than the monthly rent.
The average price of renting an apartment in Missouri is 2820 yuan, while according to the conditions that can afford to buy a house, the monthly payment is 2531 yuan, which is nearly 300 yuan less than the monthly rent.
In the Oshahua area, the average monthly rent for an apartment is 1787 yuan. According to the standard calculation of the average price of a local apartment in July of 370000 9510 yuan, the monthly payment is 1529 yuan, a gap of more than 14%.
“under the trend that rents will rise further, buying a house in these places will be more economical than renting in the long run,” the report said.
In Canada, the people with the highest housing assets are Chinese, followed by West Asian, Korean and Japanese. The housing assets of Canadians have recorded a substantial increase. Between 2006 and 2016, the net worth of Chinese housing increased by 108.82%, far ahead of all ethnic groups.