The cost of homeownership in Canada has become more expensive in the third quarter according to a report by RBC Economics Research.
Royal Bank of Canada (RBC) noted that this has not happened since the spring of 2008, and that was due to a slight rise in mortgage rates and higher property values.
The RBC index measures the proportion of pre-tax household income needed to service the costs of owning a home.
During the third quarter we saw the benchmark detached bungalow move up by 1% to 40.2% and the standard townhouse rise 0.7% to 32.3%.
The standard condo also rose by 0.5% to 27.6%, with a standard two storey home increasing 1.2% to 45.8%.
RBC has said that the housing demand has outgrown its supply, which has lead to a more competitive market, and widespread increases in home values, which most of us were already aware of.
We knew that with low inventory, the prices of homes were being pushed higher, but how many can safely say they stopped and considered the repressions of this. With increasing prices, and a more competitive market, it I only matter of time before homeownership becomes more expensive.
RBC senior economist, Robert Hogue noted that with the strong momentum seen in the housing market, and the low mortgage rates, it is unlikely that affordability will improve in the near future.
Jeff Markewich
Broker of Record with InfoMarket Group GMAC Real Estate
www.imgrealestate.ca
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