Housing affordability in Windsor is worst in third quarter since 2006, study finds

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Housing affordability for Windsor residents has declined the most among the 19 communities included in the Desjardins Quarterly Home Affordability Index released Thursday.

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The financial cooperative study focuses on Ontario and Quebec, but also includes Vancouver, Winnipeg, Edmonton, and Calgary.

“In the third quarter of 2021 what we are seeing is that access to property has never been so unaffordable since 2006 when we began publishing this analysis,” said Desjardins senior economist Chantal Routhier.

“It’s a decade for Canada, some CMAs in Ontario and Quebec, to have hit record affordability lows in the third quarter of 2021.”

The median cost of a home in Windsor in the third quarter was $ 540,865 compared to $ 632,183 in London.

In the Ontario cities survey, only Thunder Bay ($ 296,209) and Sudbury ($ 377,876) had lower median home sales prices in the quarter.

The national average was $ 680,042 while the provincial average was $ 871,150.

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The affordability rating is calculated using the typical area mortgage on a median-priced home. The cost of the mortgage is added to all costs related to home ownership to determine the qualifying income required by financial institutions to obtain that mortgage size.

The index score is then determined by the ratio of the qualifying income to the household’s after-tax disposal income.

The Windsor Metropolitan Census Area, which also includes Amherstburg, Lakeshore, Tecumseh and LaSalle, had an affordability index of 104 in the third quarter.

That represents a decrease in affordability of 75.4 percent, ranking Windsor the least affordable community in the third quarter for its own residents among the 19 CMAs surveyed. The St. Catharines-Niagara drop of just under 50 percent was the second-biggest drop.

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London had an index rating of 100.7, representing a drop of around 48 percent in affordability.
For the quarter, Windsor was one of four communities that showed an improvement in its rating.

Affordability improved by 1.3% as Windsor’s rating rose from its all-time low of 102.6 recorded in the second quarter of 2021.

“In many places we saw a real increase in average prices during the third quarter, but the price pressure was less in Windsor,” Routhier said. “It increased by 1.6 percent.

“There was also a 3.4 percent increase in household income (to $ 78,308) quarter over quarter, so it also helped improve affordability.”

Routhier added that the Windsor market really started to have affordability issues when prices took off starting in the second quarter of 2020 and continuing through 2021.

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She expects there will be more pressure on prices in the future, as demand will continue to outpace housing supply, a rising inflation rate, and an expected rise in mortgage rates in early 2022.

“The demand for housing is greater than the supply,” Routhier said.

“We have seen it in Quebec and Ontario, with COVID, people are moving to places two or three hours from the big cities. People want to get out of condos and have more space and bigger houses because they can work from home.

“That still goes on.”

Routhier said he expects an anticipated hike in mortgage rates in the first four months of 2022 to eventually start to slow demand and drive up prices.

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