In August, the average home price was 67% above the “affordable level”

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In August, the average home price was 67% above the “affordable level”

Average property prices in Montreal and Quebec peaked in May 2022, slightly later than in most other major centers across the country.

Parliamentary Budget Officer says the national average price for a property in February was more than 50% higher than it was two years ago, before the pandemic.

In a new report released Thursday, the Parliamentary Budget Officer (PBO) indicates that the national average price of properties in Canada has risen from $551,100 in February 2020 to a high of $839,600 in February 2022 – an increase of 52 % in two years.

Average property prices in Montreal and Quebec peaked in May 2022, slightly later than in most other major centers across the country.

The PBO also points out that, since February, the average price has fallen by 7%, to $777,200 last August, in line with the sharp increase in mortgage rates. The average price had fallen in August by 3% in Montreal and 4% in Quebec from their peaks.

Using a methodology developed by the International Monetary Fund (IMF), which examines household borrowing capacity and ability to purchase property in selected census metropolitan areas, including Quebec City and Montreal, the PBO says the average home price in August was 67% above what is considered an affordable level – what an average household could afford as part of a budget. #x27;normal use of its borrowing capacity.

In August, average property prices in Montreal, Ottawa, Hamilton, Toronto, Halifax, Victoria and Vancouver were more than 50% above affordable levels, says the PBO report.

Parliamentary Budget Officer Yves Giroux credits higher mortgage rates for increasing the #x27;gap between the average property price and what an average household can afford.

According to scenarios developed by the PBO, home prices could decline 12-23% by year-end from highs reached earlier this year. In Montreal and Quebec City, the decline could be between 8% and 25%, depending on the PBO's scenarios.

Our scenarios, however, are only indicative and should not be taken as forecasts of falling property prices, the organization warns.

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