Home ownership in Montreal is affordable... if your household earns over $200K a year, says analyst
There’s more evidence that home ownership in Montreal is not just becoming out of reach for the middle class, but the upper middle class as well.
Daniel Laverdière, a senior advisor at the National Bank, has crunched the numbers and, if you’re in the market, you might find them troubling.
According to the Quebec Professional Association of Real Estate Brokers, last month the median sales price for a single-family home on the island hit $720,000, more than $200,000 higher than it was in May 2019.
Financial planners suggest you shouldn’t spend more than a third of your take-home pay on mortgage payments and taxes.
Using the new mortgage rules introduced earlier this year by the federal government, which say you have to qualify for a rate of 5.25 per cent, Laverdière calculates you would need a gross household income of about $212,000.
“Going above a third of your net salary, it’s not easy,” says Laverdière. “If too much of your income is going towards the payment of your house and you don’t have anything left for retirement planning and going to a restaurant or doing all kinds of other exciting activities.”
Using the same metrics, he also calculates that a single person buying a median priced condo in Montreal would require a salary of about $130,000. The average salary of Montrealers is approximately $60,000.
Laverdière says these aren’t rules, but rather recommendations, and he knows many people will spend considerably more than one third of their pay on a home, but he cautions that’s imprudent.
Financial planner Caroline Nalbantoglu warns home ownership can come with unexpected expenses and encourages buyers to stick to a budget that makes sense.
“Unless your home is going to be your retirement plan, you have to have a retirement plan, otherwise what are you going to retire on? You have to have some type of savings to retire on,” she said.
“I usually tell them either to wait it out or I tell them to lower their expectations.”
But, many buyers want their dream house now, especially due to the pandemic, and that’s helping push prices higher. Laverdière says home prices may continue to skyrocket or maybe interest rates will rise.
“If, at one point in time, you’re not able to make the payment, then you have to make a fire sale of your house and you may be losing a lot of money at that time,” he said.
The situation in Morin-Heights, in the Laurentians, is also raising concerns, as higher sales prices are pushing up property evaluations of all homes in the area, which is also pushing property taxes higher.
“People’s property value could double without them having anything to do about it,” said the town’s mayor, Tim Watchorn.
“A lot of people are on a fixed income and they can’t absorb that kind of increase. There are increases in everything. There’s increases in food, gas, electricity.”
The good news is there are still some areas of the province that are relative bargains, such as Quebec City, where if each person in a couple is making just over $40,000, they can easily afford a home.
CTVNews.ca Top Stories
Large numbers of New York City police officers begin entering Columbia University campus
Large numbers of New York City police officers began entering the Columbia University late Tuesday as dozens of pro-Palestinian protesters remained on the campus.
Poilievre kicked out of Commons after calling Prime Minister Justin Trudeau 'wacko'
Testy exchanges between the prime minister and his chief opponent ended with the Opposition leader and one of his MPs being ejected from the House of Commons on Tuesday -- and the rest of Conservative caucus walking out of the chamber in protest.
Baby, grandparents among 4 people killed in wrong-way police chase on Ontario's Hwy. 401
A police chase which started with a liquor store robbery in Bowmanville Monday night ended in tragedy some 20 minutes later when a suspect fleeing police entered Highway 401 in the wrong direction and caused a pileup which killed an infant and the child's grandparents, as well as the suspect, investigators say.
Freeland leaves capital gains tax change out of coming budget implementation bill, here's why
Deputy Prime Minister and Finance Minister Chrystia Freeland will be tabling yet another omnibus bill to pass a sweeping range of measures promised in her April 16 federal budget, though left out of the legislation will be the government's proposed capital gains tax change.
Sword-wielding man attacks passersby in London, killing a 14-year-old boy and injuring 4 others
A man wielding a sword attacked members of the public and police officers in a northeast London suburb Tuesday, killing a 14-year-old boy and injuring four other people, British authorities said.
Man dies after suffering cardiac arrest while waiting in ER, widow wants investigation
When an ambulance took David Lippert to the hospital in March of 2023, the 68-year-old Kitchener, Ont., executive was hoping to find out why he was feeling weak and unable to walk. Some 24 hours later, he was found unresponsive in the ER.
CSE says it shared information on Chinese hacking of parliamentarians in 2022
While several MPs and senators say they were only recently made aware of China-backed hackers targeting them, the Communications Security Establishment, one of Canada's intelligence agencies, says it shared information about the incident with parliamentary officials in June of 2022.
WATCH Arnold Schwarzenegger spotted filming in Elora, Ont.
The name of the project has not been officially released although it’s widely believed to be the Netflix series FUBAR.
Eviction for landlord's use was legitimate, despite owners' partial move, B.C. court rules
A B.C. judge has upheld the eviction of a family from their North Vancouver townhouse, finding that the landlords did not take an unreasonable amount of time to move into the home after the tenants vacated it.