Your Weekly 411: Canada's Housing Affordability Improves | Top U.S. Destinations for Canadian Investors | Canada Outpaces US in Mortgage Payments

The Weekly 411:

Today we're covering

🙏 Housing Affordability Improves Across Canada 

👏🏼 Canadians Outpacing Americans in Mortgage Payments

🗽 Top U.S. Destinations for Canadian Real Estate Investors

📈 Winnipeg Experiences Strong Population Growth

🌲 Ontario Cottage Prices Are Dipping 

🤔 WTF of The Week

Read Time: 4 minutes

🙏 Housing Affordability Improves Across Canada 

• Housing became more affordable across Canada in July, following the Bank of Canada's interest rate cuts from 5% to 4.5% in June and July.​

• This marks the first time affordability has improved since January.

• Toronto saw the most significant improvement, with the income required dropping by $5,410 to $208,950.

• This was due to lower mortgage rates and a $13,300 drop in average home prices in the Greater Toronto Area.

• Vancouver also saw average home prices fall while the income required dropped by $5,020 to $226,680.

Why This Matters: Affordability is expected to improve gradually in most areas. However, increased supply in expensive markets could stimulate more demand, offsetting affordability gains.

👏🏼 Canadians Outpacing Americans in Mortgage Payments

• As of May 2024, only 0.19% of mortgages in Canada were in arrears (payments overdue by 3+ months)

• The mortgage delinquency rate in Canada remains very low compared to the United States, where 1.01% of mortgages had payments that were 90+ days overdue in Q2 2023.

• Mortgage arrears are a delayed indicator of financial stress. About half of Canadian mortgages have yet to renew at higher interest rates.​

• Smaller and medium-sized Canadian banks are experiencing higher and faster-rising delinquency rates than large "Big Five" banks.​

🗽 Top U.S. Destinations for Canadian Real Estate Investors

• From April 2023 to March 2024, Canadians were the highest number of foreign home buyers in the United States.

• Canadian buyers accounted for 13% of the total homes purchased by foreign buyers, up from 10% in the previous period

• Florida is the most popular destination for Canadian buyers, followed by Arizona and California.

• Primary motivations include investment opportunities, vacation homes, and retirement planning.

• Most Canadian buyers purchase properties with cash, avoiding the need for U.S.-based financing.

📈 Winnipeg Experiences Strong Population Growth

• Winnipeg's population grew by around 2.5% over the past year, reaching an estimated 836,250 as of July 2024.

• Population growth is expected to slow in the coming years but is projected to reach 1 million people by 2031, two years earlier than previous projections.

Housing Prices (Year-over-Year Increases):

Overall average: $403,918 (+7.2%)
Detached homes: $433,000 (+6.7%)
Attached homes: $357,000 (+9.4%)
Condos: $284,000 (+11.3%)

Why This Matters: The city's strong population growth and rising home prices indicate high housing demand, creating opportunities for real estate investors. However, these rapid price increases make it harder for first-time and lower-income buyers to afford homes. This situation highlights the need for more housing development to accommodate Winnipeg's growing population.

(source)

🌲 Ontario Cottage Prices Are Dipping 

• Waterfront property prices in the Lakelands region dropped 23% year-over-year to an average of $809,000 in July.

• Non-waterfront property prices in the same area fell 5.3% to $650,000.

• Total waterfront sales in July decreased by 22.9% compared to the previous year.

• Sales volumes are below historical averages: 

  • Non-waterfront sales: 26.3% below the 5-year average, 30.7% below the 10-year average

  • Waterfront sales: 36.7% below the 5-year average, 42.9% below the 10-year average

Why This Matters: Significant changes in cottage prices can reflect broader economic trends and consumer behavior. The steep decline in recreational property values may indicate shifting priorities or financial pressures among potential buyers.

🤔 WTF of The Week

This house in London, Ontario (43 Ravine Ridge Way, London) was sold for $1.7M in Apr 2023 and went for $1.05M last month... That's a whopping $650k loss in one year. 🤯