September 28, 2010
Housing is not affordable in Vancouver, says RBC economist Robert Hogue.
On Monday, the Royal Bank of Canada released its quarterly report on housing trends and affordability, and says that Vancouver is one of a few Canadian markets where the share of household income take up by home ownership costs “is at worrisome levels.” Yikes.
RBC says that year to year, the average price of a home in Vancouver jumped about 40 per cent, and according to Scott Simpson in the Vancouver Sun, “…the proportion of median pre-tax household income required to service the cost of a mortgage on an existing housing unit exceeds 70 per cent for both two-storey homes and detached bungalows.”
Condos are not better. A typical condo eats about 43 per cent of income, says the RBC report.
“In Vancouver, Canada’s most expensive market, RBC housing affordability measures are very close to their all-time high, which points to significant underlying stress and raises a red flag,” the report says, “very poor affordability is likely to restrain demand in the period ahead.”
Other regions with similar issues? Ottawa. Montreal. Some of Saskatchewan.
Do you live in Vancouver? Thoughts?