Home ownership became a little more affordable in Canada during the latter part of 2012, due in large part to low mortgage rates, says the latest RBC Housing Trends and Affordability Report.
“Residential property values are elevated in Canada and, for many households, ownership remains accessible only because of rock-bottom mortgage rates,” RBC chief economist Craig Wright said in a statement. “It could be a different story if interest rates were to move swiftly and significantly higher.”
The RBC report measures affordability as the percentage of monthly pre-tax income for a household needed to cover the costs of owning a home, i.e. mortgage payments, utilities and property taxes.
Across the country, affordability increased for all housing types over the last three months of 2012 (a decline represents an improvement in affordability): down 0.2 per cent to 42.1 per cent for a detached bungalow, a 0.3 per cent drop to 47.8 per cent for a two-story home, and a decrease of 0.2 percentage point to 28.0 per cent for a condo.
On the local level, Vancouver showed the biggest improvement, “but remained, by far, the least affordable market in Canada,” the report says.
In that city, the costs of owning a home – specifically, the benchmark detached bungalow – is 82.2 per cent of a typical household’s income.
Affordability also improved in Toronto, with the benchmark down 0.4 percentage point to 52.8 per cent.
Edmonton and Calgary remained two of the country’s most affordable major markets, with benchmarks of 30.7 and 38.1 per cent, respectively.
And since we often focus on condo prices here at BuzzBuzzHome, here’s a look at those numbers.
You can read the report in its entirety here.