“Mortgage costs, not just house prices, are the principal deciding factor for potential home buyers. This makes comparison of monthly payments to incomes and rents more relevant than similar comparisons using house prices alone. Slowly rising mortgage rates and a modest slowing in housing starts will gradually cool the housing market. But ongoing employment and population growth will continue to support housing demand.”

“Low interest rates since early 2009 have cushioned the impact of rising house prices, keeping the relationship of carrying costs to incomes and rents well within historical norms. For example, in Toronto, mortgage payments consumed less than 20 per cent of average household incomes in 1993 and in 2013. Mortgage payments were roughly twice the average two-bedroom apartment rent in both years.”

Reports Robin Wiebe of the Globe and Mail

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