Vancouver home affordability hits record low but may be at a turning point
The city is still—by far—the least affordable metropolitan area in Canada
By Emma Crawford Hampel
Vancouver’s housing market remains the most unaffordable market in Canada by far, and in 2016’s third quarter, affordability eroded further, according to RBC’s Housing Trends and Affordability report released December 21.
On average, in 2016’s third quarter, Vancouverites needed to spend 92 per cent of their median pre-tax household income to service the costs of mortgage payments, property taxes and utilities, based on the average market cost for all housing types. This is a record high for the city.
This is up 2.2 percentage points compared with Q2, which happens to be the smallest increase in more than two years, and according to RBC chief economist Craig Wright, this could actually be a good sign for affordability in the city.
“The third quarter could be a turning point toward improving affordability in the Vancouver area in light of a recent easing in detached home prices,” Wright said. “New mortgage insurance rules may help affordability over time, but 2017 is likely to see a tug of war between these market-cooling policy measure and rising longer-term interest rates, pulling affordability in opposite directions.
“The net effect of this on the costs of owning a home is unclear at this point.”