Housing affordability has fallen to “never-seen-before” levels in some Canadian markets, according to a new report from RBC Economic Research.
Victoria buyers with 20 per cent down would have to spend 65 per cent of a median household income to pay for an average home in 2018's second quarter, the September 28 Housing Trends and Affordability report revealed.
That’s up 6.9 percentage points in the past year and is ranked the third least-affordable city in RBC's latest report, after Vancouver and Toronto.
The report said, "The boom that propelled prices to mountain-high levels over the past two-and-a-half years gave Victoria its ticket to Canada’s unaffordable market club."
Metro Vancouver residents on average would have to devote 88.4 per cent of their income to cover the cost of home ownership, up 8.2 percentage points in the past year and the highest in Canada.
“Buying a single-detached home [in Metro Vancouver] is for the rich only,” the bank’s economic research arm stated in the report.
It added, "And settling for a condo also increasingly looks like a luxury for many." The share of a median Vancouver income needed to buy an average condo grew 8.2 percentage points to reach 52.5 per cent of household income needed to cover the costs of ownership. (The standard for affordabilty is around 30 per cent of income.)
“Worse, the [condo] situation is poised to deteriorate further as interest rates continue to rise,” the report stated.
“This means that rental housing will become the only viable option for a growing proportion of households. Whether the record 8,100 rental units currently under construction will meet that demand is an open question.”
- With files from Tyler Orton, Business in Vancouver
