The Increasing Challenges of Accessing Property in Quebec: A Call to Action for the Prime Minister and Cabinet

Dear Prime Minister, you who are a Fellow of the Order of Chartered Accountants of Quebec and who hold a master’s degree in business administration (MBA) will easily understand why it is increasingly difficult to access property since you in power.

Your assertion that rising house prices are a necessary evil and that Quebec should not “stay poor” just to keep property values ​​lower than in Ontario and British Columbia prompted me to perform a series of calculations in order to identify the real estate problem to which the Quebec is currently confronted.

Pierre Fitzgibbon, Minister of the Economy

Photo archives, QMI Agency

And it is my pleasure to share them with you, your Minister of Housing, the accountant and tax expert France-Élaine Duranceau, and your two big bosses of finance, the Minister of Finance, Eric Girard, the super Minister of Economy, Pierre Fitzgibbon.

France-Élaine Duranceau, Minister of Housing

Photo d’archives, Stevens LeBlanc

The table being set, here are the figures in question.

Eric Girard, Minister of Finance

Photo d’archives, Stevens LeBlanc

SALARIES

It is true that salaries have recorded good growth since October 2018, when François Legault took power with his CAQ team.

According to data compiled by Statistics Canada, the average weekly salary of full-time employees in Quebec reached $1,305.88 last May, compared to $1,055.32 in October 2018. This represents an increase of 23.7% in 4.5 years.

On an annual basis, the average salary of our full-time Quebec workers has gone from $54,877 (October 2018) to $67,906 (May 2023). For an increase of $13,029 in 4 and a half years.

By way of comparison, Quebec, in percentage terms, posted better wage growth during this same period than Ontario and Canada as a whole.

The average weekly wage in Ontario increased by 20.1% to $1,435.35 ($74,638/year). Nationwide, the increase is 19.2%, with wages rising to $1,384.59 ($71,999/year).

THE REAL ESTATE EXPLOSION

The average salary of full-time employees may have increased in Quebec by 23% over the past 4 1⁄2 years, how can they access property if the median prices of single-family homes and condominiums have risen significantly more?

Across the province, single-family homes have seen their median price increase by $180,000 since the CAQ came to power, now reaching $431,000, up 71.7%.

For its part, the condominium saw its median price reach $375,000, or $128,750 more than in October 2018, an increase of 69.5%.

I invite you to consult the table opposite to find out about the real estate increase that has occurred since your party came to power in October 2018 in our nine most populous major regions.

MORTGAGE FINANCING

To show you how much home ownership has become less and less accessible, I compared the cost of mortgage financing for the typical single-family home which saw its median price in Quebec drop from $251,000 in October 2018 to $431,000. Today.

In October 2018, when the official rate for the 5-year term of a mortgage amortized over 25 years was 5.34%, it cost $1508.79 per month ($18,105/year) to finance the typical property of $251,000.

Today, the acquisition of this same typical property, the price of which amounts to $431,000, will require a monthly disbursement of $2,884.33 ($34,612/year) due to the sharp increase in its price (+ 71.7%) and the increase in the mortgage rate, which now stands at 6.49%, i.e. 1.15 percentage points more than in October 2018.

This means that since François Legault came to power, not only has the typical single-family home seen its acquisition price increase by 71.7%, but even worse, the cost of mortgage financing has exploded. by 91.2%.

As for typical condominiums in Quebec, we also saw an explosion in the cost of mortgage financing, but to a lesser extent!

It costs 69.5% more today than in October 2018 to finance the typical condominium, which has gone from $246,250 in 2018 to $375,000 today. From a monthly cost of $1,480.23 ($17,763/year) in October 2018, financing the acquisition today of the same type condo now requires a monthly disbursement of $2,509.57 ($30,115/year ).

Thus, today it costs $16,507 more per year to finance the typical single-family home ($431,000) and an annual sum of $12,352 more to finance the typical condominium ($375,000).

THE REAL ESTATE ENIGMA

How do you expect a full-time employee earning an average annual gross income of $67,906 to be able to pay a net amount of $34,612 per year in mortgage to acquire a typical property at the median price of $431,000? Or shell out $30,115 a year in mortgage payments to acquire the typical $375,000 condominium?

I invite François Legault and his ministers France-Élaine Duranceau, Eric Girard and Pierre Fitzgibbon to find a solution for us.

Evolution of the median house price since the CAQ came to power

Source : APCIQ, Centris