Wednesday, January 26, 2011

Homes Less Affordable Across Canada

Homes Less Affordable Across Canada
The dream of owning a home in Canada continues to get hazier as housing prices in some of the country's largest markets skyrocket while income growth lags behind, results of a 325-city international survey of housing affordability suggest. "There are a lot of people that tend to be squeezed out of the housing market," said David Seymour, a policy analyst with the Frontier Centre for Public Policy which compiled the survey's findings. "Owning your own little patch of Canada is a dream for a lot of people that is getting tougher." The annual International Housing Affordability Survey, released Tuesday, compared home prices and household income in 325 cities in Canada, Australia, Hong Kong, Ireland, New Zealand, Britain and the United States.

Household Debt At A Near-boiling Point
With average household debt in Canada at nosebleed levels -- it reached 148 per cent of annual disposable income in the third quarter of 2010 -- and interest rates likely to rise later this year, many consumers are flirting with disaster. Some are already in crisis mode, says Hannah, whose New Westminster, B.C.-based non-profit organization offers free credit counselling, education and debt management programs for debt-strapped consumers. "For a lot of people, they've leveraged themselves to an extreme. With the vast majority of our clients, most of them are just a paycheque or two away from financial difficulty. They're that highly leveraged," he says. "The average consumer walking through our door is in their early 40s, they carry six or seven credit cards and owe anywhere from $25,000 to $50,000 on those cards." "So they're just able to keep up with their minimum obligations."

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