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News Article

Affordability stretched

Courtesy of Financial Post

The cost of owning a home increased slightly in the final quarter of 2009, with Vancouver remaining the least affordably city in the country, according to an RBC report released Monday.

"While home affordability deteriorated at the national level in the fourth quarter of 2009, the change was relatively modest overall," Robert Hogue, senior economist at RBC said in the release. "The effect of higher prices was largely mitigated by a small decline in mortgage rates and continued gains in household income."

The RBC Housing Affordability study measure represents the proportion of pre-tax household income needed to service the costs of owning a home; the higher the measure, the more difficult it is to afford a home. An affordability reading of 50 per cent means that home ownership costs, including mortgage payments, utilities and property taxes, take up 50 per cent of a typical household's monthly pre-tax income.

Nationally, the detached bungalow benchmark inched 0.3 per cent higher to 40.6 per cent. Vancouver was the least affordable at 69 per cent (up 1.4 percentage points), Toronto was at 49.1 per cent (up 0.1 percentage point). Calgary rated 37.1 per cent (up 0.1 percentage point) and Edmonton at 32.9 per cent (down 0.4 percentage points).