RBC says that owning a home in Canada in the third quarter of 2016 was the least affordable in nearly 8 years. Its Housing Trends and Affordability Report reveals that affordability declined for the sixth consecutive quarter.
The rise in unaffordability was highest for single-family homes – the index gained 1.3 percentage points to 49.4 per cent – while unaffordability of condos rise 0.8 percentage points to 35.6 per cent on the index.
The Greater Toronto Area replaced Vancouver as the market with the largest rise in unaffordability and marking the GTA’s highest reading since 1990. However, Vancouver’s ownership costs rose the fastest.
“The third quarter could be a turning point toward improving affordability in the Vancouver area in light of a recent easing in detached home prices, but further deterioration is likely to occur in the near term in Toronto,” said Craig Wright, RBC chief economist.
He added that the new mortgage insurance rules may help the situation over time but expects that 2017 could see s “tug of war” between market-cooling measures and rising longer-term interest rates.
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Cooling house prices have done little for housing affordability; in fact, it’s getting worse.