There seems to be a growing acknowledgment that housing in these parts is getting out of reach for an increasing number of people, but it was nonetheless sobering to see where the numbers have gone.
The last few years have seen a spike reminiscent of Vancouver or Toronto, and although prices here are still affordable compared to those major centres, they’re making it more and more difficult for would-be buyers to break into the market.
According to figures from realtor.ca, house prices in Okotoks remained relatively flat for the five years ending in 2020, but have increased significantly since that time.
The benchmark price was $409,425 in 2020 (which was actually down about $10,000 from 2015), but four years later it had reached $577,818. If my math is correct, that’s a not so subtle 41 per cent increase.
Having come from Greater Vancouver, where I witnessed an overheated market price many people, particularly young ones, out of the area, I wondered what impact the recent surge in prices in Okotoks has had on those hoping to buy here.
If you’re coming from one of those places with a stupid-hot market, higher prices here won't be a concern, but if you’re a first-time buyer with no equity other than a hard-saved down payment, this might be the right time to look away as the numbers are discouraging.
I used the mortgage calculator on realtor.ca to figure out the difference in monthly payments between the 2020 home and the same one four years later. I put 10 per cent down on both homes and used the Royal Bank’s current five-year fixed rate of 4.9 per cent to do the calculations.
The monthly mortgage payment on the $409,425 home was $2,186, but when that home increased in value to $577,818, the monthly payment jumped almost $800 to $3,083.
Those who saw their after-tax income increase by $800 a month over the last four years will be just fine, but for all the rest, the supercharged market so far this decade means housing is less attainable.
I don't know where prices are headed, and whether it will be even more difficult to become a homeowner in the years ahead, but coming from Greater Vancouver, I’m all too familiar with the idea of single-family home ownership turning into a pipe dream.
For my parents’ generation, who were buying their first home in the 1960s, it essentially took one income to qualify for a mortgage. By the time my generation got into the market in the 1990s, it took two incomes to buy something that would charitably be referred to as a fixer upper.
It was quite a drop-off but nothing as severe as what’s facing my son’s generation, which has given up any hope of ever buying a single-family home and is mortgaged to the hilt to even get something smaller.
It’s a depressing outlook and why many are coming to the realization that water and mountains simply aren’t worth the cost. It's a far rosier picture here, to be sure, but it still must be disconcerting for young people to see how prices are trending.
