In fact, due to the heat in the Toronto and Vancouver markets in particular, you’d have to go back almost 30 years to 1990 to find a time less affordable than now according to research from RBC Economics Research.
The nationwide affordability measure (as a share of income) was 46.7% in the second quarter of 2017, a rise of 1.4 percentage points from the previous quarter. It’s the eighth consecutive quarter that affordability has worsened.
The RBC Housing Trends and Affordability Report says that the Ontario Fair Housing Plan had yet to show any real impact while the effects of previous policy changes in Vancouver were starting to weaken.
“Once again, the Toronto area played a big role in shifting up the national affordability needle in Q2”, said Craig Wright, Senior Vice-President and Chief Economist, RBC. “While Ontario’s Fair Housing Plan did cause a reaction on the part of buyers and sellers in April, the impact on prices wasn’t felt immediately. In the end, any evidence of price moderation in the Toronto region emerged too late to make a difference in the second quarter.”
Toronto saw a jump of more than 4 percentage points to 75.4% - a new record high.
In Vancouver, prices started to rise again in the second quarter following decline after the foreign buyers’ tax and other policy measures. Affordability in the second quarter was 80.7%, the highest in Canada.
Victoria’s affordability measure hit a new record high of 58.6%.
Elsewhere, the RBC report
shows relatively little movement and the overall percentages remain low compared to the fiery markets; but there are some potential headwinds nationally.
“Rising interest rates could have significant implications for housing affordability nationwide,” warned Wright. We estimate that this potentially could lift the RBC aggregate affordability measure up by a further 3.5% nationwide, although other factors such as income gains would have a mitigating effect.”
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Owing a home continues to be elusive for many Canadians as affordability remains a major challenge.