ZT: Cost of home ownership continues to rise: RBC

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ZT: Cost of home ownership continues to rise: RBC

Canadian Press
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Wednesday, September 12, 2007

/ O6 Z& U6 Z' g5 F" y" pTORONTO — The cost of owning a home in Canada continued to climb in the second quarter as affordability in Western Canada showed the biggest change, according to a new report by the Royal Bank.

: L% ~9 x( D7 `! D" {8 WSaskatchewan suffered its worst ever quarterly deterioration of affordability on record, according to the bank, as an influx of people caught the housing supply off guard.
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6 @# i  {, X: ~" q$ i“In the second quarter, Canada's housing affordability experienced one of the largest and most broadly based quarterly deteriorations since the mid-1990s,” said Derek Holt, assistant chief economist, RBC.

: A) {$ `/ q* T' n7 e( x. i' Q“Higher house prices, mortgage rates, utilities and property taxes all combined to drive the country-wide deterioration.”

The report measures the proportion of pre-tax household income needed to service the costs of owning a home. The higher the reading, the more costly it is to afford a home

The bank said a standard condo was the most affordable, requiring about 29 per cent of income compared with 27.5 per cent in the first quarter.

A standard townhouse was next at 33 per cent, up from 31.5 per cent in the first quarter followed by a detached bungalow which increased from 39 per cent to 41 per cent in the second quarter.
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A standard two-storey home was 46 per cent, up from 44 per cent in the first three months of the year.
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/ f# g1 X' |- `% [0 \Saskatchewan, Alberta and B.C. saw the biggest increase in costs in the quarter.

# L! Z+ ^6 q7 c( Z. Y' \Affordability fell about 20 per cent in Saskatchewan with no signs that prices were letting up yet, but the bank said the high prices were starting to weigh on demand.

Among Canada's largest cities, a detached bungalow in Vancouver was the most expensive with the proportion of pre-tax household income needed to own a home coming in at 71 per cent. Toronto and Calgary followed at 45 per cent, Montreal at 36 per cent and Ottawa at 31 per cent.

“Market conditions in Vancouver have loosened up during the year, but conditions remain tilted in favour of a seller's market and are still supportive of fairly strong price gains,” the report said.

smalltown

The prices of reasle homes are falling, how about new homes in Edmonton?

BaiLing

Cost of home ownership continues to rise,RENT WILL BE CONTINUING TO RISE AS A RESULT