Hous­ing af­ford­abil­ity hits worst level in 27 years: RBC

Truro Daily News - - CANADA - By ArminA Lig­AyA

Hous­ing af­ford­abil­ity in Canada hit the worst level in 27 years in the sec­ond quar­ter of this year, ac­cord­ing to a Royal Bank of Canada re­port.

RBC Eco­nom­ics said in a re­port Fri­day that its hous­ing af­ford­abil­ity mea­sure for Canada de­te­ri­o­rated for the eighth straight quar­ter. The Toronto area was the hard­est hit, where RBC says af­ford­abil­ity de­clined the most com­pared to the pre­vi­ous year and hit the worst level ever mea­sured in the city.

The On­tario govern­ment’s ac­tions in April to cool down the hous­ing mar­ket, in­clud­ing a for­eign buyer’s tax, did not have an im­me­di­ate im­pact on pro­vin­cial hous­ing prices in the sec­ond quar­ter, RBC said.

“Clearly, home own­er­ship re­mains out of reach for many would-be buy­ers in the area,” RBC Eco­nom­ics said in the re­port. “The good news is that some re­lief is on the way. Re­cent down­ward pres­sure on prices is poised to lower own­er­ship costs in the pe­riod ahead. The bad news, un­for­tu­nately, is that ris­ing in­ter­est rates will take some of that re­lief away.”

Still, the least-af­ford­able place to pur­chase a home re­mains the Van­cou­ver area, where af­ford­abil­ity wors­ened af­ter two straight quar­ters of im­prove­ment but re­mains bet­ter than a year ago. Out­side of Bri­tish Columbia and On­tario, af­ford­abil­ity re­mains mostly sta­ble, RBC said.

RBC’s hous­ing af­ford­abil­ity mea­sure shows the pro­por­tion of me­dian pre-tax house­hold in­come re­quired to ser­vice the costs of own­ing the av­er­age home — fac­tor­ing in both con­dos and sin­gle-fam­ily de­tached homes — in­clud­ing mortgage pay­ments, prop­erty taxes and util­i­ties.

The Van­cou­ver area was the least af­ford­able in the lat­est quar­ter ended June 30 at 80.7 per cent, down 2.4 per cent year-on-year. The Toronto area was sec­ond­high­est at 75.4 per cent, mark­ing an in­crease of 12.7 per cent. Vic­to­ria came in third at 58.6 per cent, with a year-on-year in­crease of 7.3 per cent. Across Canada, RBC’s hous­ing af­ford­abil­ity mea­sure hit 46.7 per cent in the lat­est quar­ter, a level not seen since the end of 1990.

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