Housing affordability declines in August across provinces, except B.C.

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The amount of income required to qualify for a mortgage in Canada increased in every province, except for British Columbia, where average home prices also decreased.

The findings by online mortgage provider Nesto highlight that B.C. is the only province where affordability actually improved slightly.

Still, buyers in B.C. require nearly $200,000 in annual income to qualify under the federal stress test based on the average five-year fixed interest rate mortgage of 5.24 per cent.

The amount of income required in B.C. to qualify at 7.24 per cent — the new stress test threshold of two percentage points plus the offered rate — continues to be the highest in Canada.

But the income required is now $12,000 less than August 2022 even though the stress test interest rate to qualify was 6.34 per cent last year.

The reason being is the average price of a home fell nearly $18,000 year over year to $998,900 in August.

In contrast, Alberta saw among the largest increases in yearly income required to qualify, up nearly $8,500 to more than $102,000. The rise is partly due to higher borrowing costs but also a result of an increase in the average price of a home.

The average price in August was about $483,300, up about $10,000 from the same month last year.

Alberta ranked third for highest income qualification requirements among all provinces, trailing B.C. and Ontario in second spot.

In Canada’s most populous province, the required annual income grew by more than $11,300 to $190,540 to qualify under the stress test for a mortgage. That’s despite average home prices declining $6,000 to $920,000.