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' M" x, P7 m& l( s ?ZT: Cost of home ownership continues to rise: RBC/ v1 T* J$ B4 z4 @+ a9 X
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Canadian Press+ x- O+ {! _+ Q1 B8 |& e
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Wednesday, September 12, 2007* h4 J; x) \) |9 `: S- z! o; a
2 l4 k2 [+ J0 z7 C8 o+ }5 eTORONTO — The cost of owning a home in Canada continued to climb in the second quarter as affordability in Western Canada showed the biggest change, according to a new report by the Royal Bank.
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Saskatchewan suffered its worst ever quarterly deterioration of affordability on record, according to the bank, as an influx of people caught the housing supply off guard." P- Q. A* o( \) Q# I B
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“In the second quarter, Canada's housing affordability experienced one of the largest and most broadly based quarterly deteriorations since the mid-1990s,” said Derek Holt, assistant chief economist, RBC.3 x) o/ ?5 x# k& ^7 ~+ [ x. Y
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“Higher house prices, mortgage rates, utilities and property taxes all combined to drive the country-wide deterioration.”
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/ B8 V" \8 g! e- z" S. GThe report measures the proportion of pre-tax household income needed to service the costs of owning a home. The higher the reading, the more costly it is to afford a home
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The bank said a standard condo was the most affordable, requiring about 29 per cent of income compared with 27.5 per cent in the first quarter.
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A standard townhouse was next at 33 per cent, up from 31.5 per cent in the first quarter followed by a detached bungalow which increased from 39 per cent to 41 per cent in the second quarter.
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! @" S9 k6 I' @' aA standard two-storey home was 46 per cent, up from 44 per cent in the first three months of the year.. E0 z2 I+ R3 z
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Saskatchewan, Alberta and B.C. saw the biggest increase in costs in the quarter.
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" T0 l, r% p, X7 lAffordability fell about 20 per cent in Saskatchewan with no signs that prices were letting up yet, but the bank said the high prices were starting to weigh on demand.
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Among Canada's largest cities, a detached bungalow in Vancouver was the most expensive with the proportion of pre-tax household income needed to own a home coming in at 71 per cent. Toronto and Calgary followed at 45 per cent, Montreal at 36 per cent and Ottawa at 31 per cent.
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“Market conditions in Vancouver have loosened up during the year, but conditions remain tilted in favour of a seller's market and are still supportive of fairly strong price gains,” the report said. |
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