Home ownership in city above CMHC affordability threshold

The cost of owning a home in Prince George in 2018 was slightly above the Canada Mortgage and Housing Corporation's suggested threshold, according to a report from the B.C. Northern Real Estate Board.

The costs of mortgage payments, municipal taxes and fees, and utilities for the average single-family home stood at 30.9 per cent of before-tax median household income. According to the CMHC, housing is considered affordable if it costs less than 30 per cent.

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A typical single-family home sold for $350,713 in 2018, a $31,546 increase over the year before according to numbers derived from the Multiple Listing Service for the city.

"Historically, the largest cost contributor to annual changes in affordability has been house prices, and this trend continues for 2018," economic Leslie Lax said in the report.

"Mortgage costs, which are based on house prices and interest rates, tend to comprise upwards of 70 per cent of the costs included in the housing affordability index. It is therefore not surprising that higher house prices tend to reflect lower affordability."

For the northern B.C. region as a whole, the cost of home ownership stood at 26.9 per cent, up two percentage points from the year before.

At 47.2 per cent, 100 Mile House was the most onerous, "chiefly as a result of the median household income being around 54 per cent of that of northern B.C.," Lax said.

Fort St. John, where the rate stood at 22.4 per cent, was the only community to see consistent improvements over the last few years, "largely due to a persistent drop in house prices over the period."

At 20.6 per cent, Kitimat was the most affordable.

"Despite a 34-per-cent increase in house prices between 2017 and 2018, highe- than-average household income kept housing affordable in Kitimat," Lax said.

Looking at other communities, affordability stood at 28 per cent in Prince Rupert, 25.6 per cent in Quesnel, 26.6 per cent in Smithers, 30.4 per cent in Terrace and 28.6 per cent in Williams Lake.

Home ownership in all northern B.C. communities remain "exceptionally favourable" when compared to the Vancouver area, where it stood at 118.9 per cent, and Victoria, where it was 66.1 per cent.

Mortgage costs are based on the average house price with 25 per cent down and a five-year fixed rate mortgage which, in turn, is based on Bank of Canada monthly data for a five-year conventional mortgage.

Median income is drawn from the census conducted in 2015 and adjusted by the growth rate for average weekly earnings for British Columbia as obtained from Statistics Canada.

The full report is posted with this story at www.princegeorgecitizen.com.

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