Canadian home affordability falls
Alberta the exception in home ownership costs
Owning a home in Canada has become more expensive — unless you live in Alberta — a report released Tuesday by RBC Economics Research suggests.
RBC said home ownership costs in Canada rose for the third straight quarter across all housing segments in the first three months of 2010.
Affordability measures the proportion of pre-tax household income needed to service the costs of owning a home.
"Although home ownership became more costly in the first quarter of 2010, affordability measures are still moderately above the long-term average and below peak levels," RBC senior economist Robert Hogue said in a release.
| Housing affordability for a detached bungalow | ||
| Proportion of income | Change (percentage points) | |
| B.C. | 66.0% | +4.0 |
| Alberta | 33.0% | -0.4 |
| Saskatchewan | 41.4% | +0.9 |
| Manitoba | 37.0% | +1.8 |
| Ontario | 39.6% | +0.4 |
| Québec | 34.8% | +0.5 |
| Atlantic Provinces | 30.5% | +0.1 |
| Source: RBC Economics Research | ||
"We expect affordability to deteriorate throughout 2010 and 2011, but this should be limited, as more balanced supply and demand conditions will take much of the steam out of the housing market," he said.
With the exception of Alberta, home affordability measures deteriorated across all provinces with a significant decline in affordability in B.C., Saskatchewan and Manitoba.
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Housing affordability declined more moderately in Quebec, Ontario and Atlantic Canada.
Alberta is the only province to show a drop in the costs of owning a home.
"We believe that the spectacular rally in housing prices over the past year will soon end, as rock-bottom mortgage rates increase," said Hogue.
With files from The Canadian Press