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. |2 K" Q% t: b# i w( r- AZT: Cost of home ownership continues to rise: RBC6 R: f0 c K, w; x2 b: i+ Y
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Canadian Press/ [6 @6 d: {/ s3 v
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Wednesday, September 12, 2007
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1 Y. q! a7 g5 }TORONTO — 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.9 a. ]# n! D# W2 `" T) O2 f) M I
; x- _! W# x+ `$ USaskatchewan 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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5 r" T, K4 S6 h4 J$ G; o9 ]“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.; j( o* d" L- `$ e0 t# ]3 {
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“Higher house prices, mortgage rates, utilities and property taxes all combined to drive the country-wide deterioration.”8 M6 C" Q$ R" g( G. }( z
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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 home8 s0 i! ?3 }% E, B0 H0 t
0 ?+ f7 [5 ]6 p+ f2 a7 cThe 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.8 G5 j7 r+ L; r$ [# N- `: q7 Y
- P: u% [" b9 DA 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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$ A8 T1 j7 b6 KSaskatchewan, Alberta and B.C. saw the biggest increase in costs in the quarter.
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* _, Y; I: h8 k; t4 WAffordability 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.
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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.
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“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. |
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