Housing Affordability on the Decline in B.C.

downtown Vancouver | BCBusiness
Vancouver remained the most expensive market in the country, with 82.4 percent of our net incomes going to owning the benchmark home.

A new report from RBC Economics Research confirms it: We’re bloody expensive

The least affordable housing market in the country just got a bit more out of reach. But according to the latest Housing Trend and Affordability Report, released by RBC Economics Research on Tuesday, affordability differs depending on the type of housing involved—with condo affordability stabilizing in Vancouver and across B.C. in the first quarter of 2014, while the affordability of single-family homes continued to deteriorate.
The RBC Housing Affordability is based on the calculated costs of owning the benchmark home, a detached bungalow, at market value; a two-storey home and condominium apartment are also measured. An affordability reading of 50 per cent means that home ownership costs, including mortgage payments, utilities and property taxes, would take up 50 percent of a typical household’s monthly pre-tax income. In the latest report from RBC, B.C’s affordability index increased to 68.4 percent for bungalows, 74.2 percent for two-storey homes, and remained unchanged at 33.6 percent for condos.
The situation was even worse for B.C.’s biggest city. Vancouver saw the affordability index increase by 0.9 percentage points to 82.4 per cent for bungalows and 0.6 percentage points to 86.5 percent for two-storey homes. Condos affordability sat at 39.9 percent, down one percentage point. By comparison, Toronto’s affordability index sat at 56.1 percent for bungalows, Montreal’s at 38.9 percent, and Calgary’s at 34.5 percent.
According to RBC, strong price increases for detached bungalows and two-storey homes led to higher ownership costs across the province, with price increases in the Vancouver market, experienced since last fall, reversing most of the losses that occurred in 2012 and the early part of 2013.
“With prices back in growth mode, the improvements we’ve seen in Vancouver’s affordability levels over the last two years will be difficult to replicate,” said Craig Wright, RBC’s senior vice-president and chief economist in a statement.