As Vancouver housing prices continue to surge, a new report by RBC Economics says “housing affordability is being crushed” with the worst recorded level anywhere in Canada.
RBC says housing affordability is the cost of owning a home at market price as a share of household income, so a higher number means housing is less affordable.
Senior Economist Robert Hogue says an epic surge in Vancouver prices pushes RBC’s first quarter affordability measure for Vancouver to 87.6 per cent.
“If you were to buy at today’s price and based on today’s interest rates this is what it would require as a percentage of your income, so that would be 87.6% in the Vancouver area for all types of housing.”
He says home resales are booming in Victoria as well, and prices are rising rapidly.
The Royal Bank says the higher cost of ownership in most other areas of Canada was modest relative to income.
The bank says its aggregate affordability measure rose by 0.8 percentage points to 47.1 per cent in the first quarter, its fourth consecutive quarterly increase.
The measure is the proportion of median pre-tax household income required to pay the cost of mortgage payments, property taxes, and utilities based on the average market price.
Royal Bank says the affordability of a single-detached home in Vancouver hit the worst recorded level for anywhere in Canada.
The bank’s affordability measure for a single-detached home climbed 9.9 percentage points to 119.5 per cent in Vancouver and 1.2 percentage points to 71.7 per cent in Toronto.