What does affordable mean? | Toronto Sun

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Prices are unattainably high for many would-be buyers yet people buy new homes every day

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We hear a lot about affordability – especially the lack of it – in the new construction real estate market across the Greater Toronto Area, Ontario and Canada as a whole. Certainly, it is difficult to understand current prices compared to those of a decade or two ago.

Keep in mind, however, that a lot has changed with the pandemic, supply chain problems, government red tape and other outside forces that keep our housing supply falling far behind our increasing demand.

For years, we have been reading about affordable housing and how difficult it is to find nowadays. But what does the word “affordable” mean? Who defines it?

CMHC has defined it to mean that a home or condominium costs less than 30 per cent of your total household before-tax income ( According to Loans Canada (, millions of Canadians are spending more than 30 per cent of their income on housing costs.

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Unfortunately, for many people, keeping that spending under 30 per cent is inadequate to allow them to stay in their current homes or buy new ones.

Statistics Canada and CMHC reported that in 2018, more than 1.6 million Canadians lived in core housing need, which means they lived in unsuitable, inadequate or unaffordable dwellings and could not afford alternative accommodations (

One can only imagine how that number has grown since the pandemic and soaring home prices. What held true long ago is irrelevant today, when the average house in the GTA costs over a million dollars. The average home price for Canada hit an all-time high in January of this year, at $748,439.

At the top of most homebuyers’ must-have lists are location and price – and of course, price depends greatly on location. Altus Group statistics show that in March, the benchmark price for condos in the GTA reached a record of $1,252,515, and for low-rise homes it was $1,838,396.

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The news that the Bank of Canada’s recent rate rise and hints that more rises are to come later this year have resulted in the cooling down of home and condo prices as some people sit on the sidelines watching.

Prices are, however, still unattainably high for many would-be buyers. And yet, people buy new homes and condominiums every day, even in Toronto and the Greater Toronto Area, where prices are among the highest in Canada.

Ultimately, home buyers define “affordable” according to their pocketbooks, but it seems like we need special definitions of “affordable” depending on where in Canada we live.

Barbara Lawlor is CEO at Baker Real Estate Inc. Keep current with The Baker Blog at blog.

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