Housing affordability is an ongoing issue in this province. While Albertans enjoy the highest average weekly earnings in Canada, not everyone is living as comfortably as that suggests. The disparity between the highest and lowest wage earners is wide and growing. In 2010, 6.8% of Albertans were living with incomes below the LICO.
Attainable Homes, a Calgary home ownership program, has seen an “explosion” of interest as more and more middle income families find it difficult or impossible to purchase or even rent in the city. However well-intentioned, are such stop-gap measures really prudent or should underlying issues be addressed?
The surge of newcomers to the province, artificial land scarcity slowing new developments and the City dragging its heels on the secondary suites issue has been putting a crunch on housing. Vacancies are low and resale inventory is down nearly -32% year-over-year bringing it to its lowest level since at least 2006.
Although interest rates are at historic lows, they have been tempered by the the latest round of mortgage rule tightening along with rising prices leaving many would-be buyers on the sidelines. (Don’t be mistaken, those rule changes were necessary) These first-time buyers are essential to the housing market as they have a trickle-up effect.
The resale market right now is tight with less supply and sales up year-over-year which will put pressure on prices. But if prices rise too high or too quickly, eventually the market will once again reach a point where affordability eludes enough Calgarians that sales will stagnate and prices will have to adjust accordingly.