House prices keep going up but they are more affordable thanks to cheap debt
House prices keep going up in most parts of the country but affordability improved last quarter, according to one of the country’s major banks.
"It was more affordable to own a home in virtually all provincial and major local markets across Canada in Q2, and in the face of solid price gains no less," said Craig Wright, chief economist with a major bank.
The economist has chalked u p the apparent discrepancy to mortgage rates, which continue to hover near all-time lows and have reduced interest costs.
The Canadian Real Estate Association reported this month July sales rose 7.2% from a year ago. Prices across the country jumped 5% during the same period with the average sale price of $401,585.
Economists had anticipated a rebound in activity from earlier this year when the harsher than normal winter weather took hold. The continued drop in fixed mortgage rates, the biggest in almost four years resulted in an improvement in affordability, which in result gave the Canadian housing market a boost of extra energy.