A recent report by RBC Economist, released earlier this month, found that affordability eroded in all the major markets across Canada, with British Columbia being the hardest hit. More specifically, Vancouver. Significant home price gains in the Vancouver Real Estate Market have helped fuel already high prices soar even higher. Vancouverites can expect that up to three quarters of their hard earned cash will go towards mortgages on their detached bungalows.
Here’s a quick snapshot of the current percentage of family income allocated for mortgage payments in Canadian cities:
- Vancouver 72.1% (Up 3.4%)
- Toronto 47.5% (Up 0.8%)
- Montreal 43.1% (Up 2%)
- Ottawa 39% (Up 0.4%)
- Calgary 35.9% (Up 0.9%)
- Edmonton 31.5% (Up 0.5%)
Vancouver Housing Market - Courtesy of RBC
The report indicates that although Provincial housing markets are on the rise, they still remain resonably affordable. The exception being British Columbia, which showed slight improvements last year but remains in “extremely poor condition”. These conditions are expected to worsen as interest rates are set to rise.
“Such strained conditions warrant close monitoring for any sign that the Vancouver and B.C. markets have become dangerously disconnected from prevailing local housing demand fundamentals.”
Robert Hogue
Senior Economist
Source: RBC HOUSING TRENDS AND AFFORDABILITY | MAY 2011
