THUNDER BAY -- On average, this city is one of the most affordable places in Canada to own a home.
That’s according to Warren Philp, a market analyst with the Canada Mortgage and Housing Corporation, who calculates that the average down payment and mortgage on a home is lower in Thunder Bay than in many other comparable city's across the country.
The average homeowner in Thunder Bay would be paying about $1,200 per month in principle and interest, which is less than $1,400 in Winnipeg and $1,300 in Sudbury.
“There’s no question Thunder Bay is still one of the most affordable markets,” Philp said.
Philp compared Thunder Bay to the other markets in Canada with more than 100,000 people and said the city reflects well.
The Toronto Star recently ran an article comparing the income required to own a home in different cities across the country.
The calculator used in that article shows an average annual income of $52,000 would be required for the average priced home in Thunder Bay, is projected to be $227,000 from 2014 sales.
The carrying costs are then calculated assuming a 10 per cent down payment with a five per cent mortgage rate on a 25 year term.
As with much of the country, real estate prices have been skyrocketing in the past few years.
A report released last week by Deutsche Bank estimates that Canadian homes are the most overvalued in the world, at 63 per cent.
Locally, prices continue to go up.
“Over the past four or five years we have been averaging a 10 per cent increase year over year,” he said. “Even with the increased listings and somewhat slowing in demand our average price still rose about eight per cent in 2014 from 2013.”
It has become common for bidding wars to break out, leading to houses selling above the list price.
Philp said the local market is starting to reach balance as the supply of houses for sale is starting to catch up to the demand.
However that doesn’t necessarily mean prices will tail off as prospective buyers who were turned off by the competition might start looking.
“There being more supply might actually bring more buyers out into the market, which is a good thing,” he said.
NOTE TO READERS: This is a corrected version of the story, clarifying how the affordability rate is calculated.