The cost of owning your own home has risen for the first time since the spring of 2008, with housing becoming less affordable in nearly all Canadian provinces, a new report found.
The RBC Housing Affordability survey measures the proportion of pre-tax household income needed to service the costs of home ownership. The measure rose across all housing types in the third quarter, with standard bungalows and two-storey homes seeing the biggest gains.
Record low interest rates to kick-start the economy sparked a fast rebound in the property market, with prices in many areas hitting new records. Demand for housing has outstripped supply since the recovery began last winter, the survey said.
"With such strong momentum in the housing market and the cyclical low in mortgage rates behind us, it seems unlikely that affordability will improve in the near future," RBC senior economist Robert Hogue said.
The cost of owning a detached bungalow rose 1% to 40.2%, the standard townhouse cost increased 0.7% to 32.3% and that for a two-storey home climbed 1.2% to 45.8%
In Western Canada, where property prices saw some of the biggest declines, the cost of owning a home rose for the first time in more than a year. British Columbia saw its first increase in five quarters. The Affordability Index in Vancouver now stands at 66.8%.
RBC said the change marks an end to the affordability upswing in B.C., with home ownership costs likely to remain well above long-term averages.
In Alberta, costs rose for the first time since late 2007, with the index in Calgary standing at 36.7%.
Ontario, Quebec and Saskatchewan also became less affordable in the third quarter, with the cost of owning a home coming out at about 48.6% of pre-tax family income in Toronto and 37.5% in Montreal.
Owning a home was least expensive in Atlantic Canada and Manitoba.
