THUNDER BAY — House prices in Thunder Bay are the most affordable among all major housing markets in Ontario, by a long shot.
Re/Max has released an analysis of data collected by the Canadian Real Estate Association, and it shows that the projected average selling price of $338,000 in the coming year is easily the lowest in the province.
Sudbury is in second place, with a forecast average 2023 price of $490,000, followed by Windsor at $649,000.
According to the Thunder Bay Real Estate Board, the average price in Thunder Bay in 2022 was $333,000, so if the current outlook for housing in the city proves accurate, prices this year will increase by an average of only 1.5 %.
The Re/Max report states that the average required down payment for a house in the city this year will be about $68,000, and the average monthly mortgage payment will be just under $1,700.
Based on the average of household incomes in Thunder Bay, this means 27 per cent of the monthly income would have to be allocated to paying off the mortgage.
According to Canada Mortgage and Housing Corporation, housing is considered “affordable” if it costs less than 30% of a household’s before-tax income.
A recent survey conducted by Leger found that 18 per cent of Canadians define housing affordability as allocating up to 40 per cent of their income toward housing costs including mortgage payments, property taxes and other housing-related expenses.
Real estate board president Karen Hill said Thunder Bay's housing market has been relatively stable for years.
"We did see a spike when interest rates went down. Just like the rest of the country we did see multiple offers and historically low houses on the market, so that caused our average sale price to increase. Now that the interest rates have gone up a little bit, we have noticed a bit of stabilization, not as severe as some other parts of the country. Our market has just shifted a bit," Hill said in an interview.
"Everything is going to be determined by what the Government of Canada does with the interest rate. The economists have been telling us they're going to stabilize or they're going to reduce them marginally, which always helps out the markets."
Hill added that many local buyers who had planned to purchase a house in a higher price range have already set their sights on a lower range due to higher interest charges on mortgages.
"They are more like pre-pandemic interest rates ... We don't consider them very high, but if people were looking last year and are looking now, it does discourage them a little bit."
Hill said that although some buyers are concerned about the higher interest rates, "in Thunder Bay it doesn't seem to have affected our prices very much. My colleagues in Southern Ontario are asking for $400,000 reductions. We're not seeing anything like that around here."
The top three most affordable neighbourhoods in the city are currently the East End, Simpson-Ogden and the downtown south core vicinity.
In contrast, the top three least affordable neighbourhoods based on average residential sale prices are River Terrace, Mariday Park, and Sherwood Estates.
