Vancouver Home Affordability Has Biggest Drop in 26 Years: RBC

According to a new report from Royal Bank, housing affordability in Vancouver had its biggest drop in 26 years during the first half of 2016, however signs of cooling are starting to emerge in Vancouver and Toronto.

Royal Bank stated its home affordability measure reached 90.3 per cent for Vancouver by the end of June after increasing by 6.6 percentage points during the first quarter of the year and 6.1 percentage points during the second quarter of the year.

The home affordability measure is the percentage of median pre-tax household income required to pay mortgage, property taxes and utilities for all types of homes.

The home affordability measure increased to 126.8 per cent of median pre-tax income to carry for single detached houses in Vancouver. Royal Bank said that owning a single-detachd home at current prices in Vancouver is a luxury that very few locals can pay for.

RBC also stated that the level of Toronto's affordability measure was the highest since the third quarter of 1990. The home affordability measure reached 60.2 per cent of median pre-tax income at the end of June. This was largely due to the rise in value for single detached home costs.

According to Craig Wright, RBC's chief economist signs of cooling resale activity has popped up in both Vancouver and Toronto. He stated that the bank believes that the fast pace of property appreciation in both cities may slow by the end of this year.

Reference: CBC News

http://www.cbc.ca/…/housing-toronto-vancouver-rbc-td-1.3741…