Translating to an overall rise of 46.7 per cent in the index last year, this level—which was uncovered by the annual RBC Housing Trends and Affordability Report—is the highest in five years. This figure refers to the proportion of pre-tax household income needed to cover the price of owning a particular property at its current market value.
The study pointed at the red-hot markets of Toronto and Vancouver as chiefly responsible for muted price drops, only counteracted by declines in the rest of Canada’s real estate markets.
“While prices continue to escalate in Vancouver and Toronto markets, there are few signs that housing affordability is problematic elsewhere in Canada. Homes in other markets remain affordable with the situation either improving or remaining fairly stable,” RBC Chief Economist Craig Wright stated in the report, as quoted by Kelowna Now.
The report added that Alberta affordability has remained flat due to weaker purchasing power brought about by oil shocks and a provincial recession, while Calgary has been seeing price declines that might continue to improve affordability well into 2016.
In high-priced Toronto and Vancouver, the lack of affordability is most readily visible in the single-detached home market. This development has made condominiums a viable choice for many households in these cities.
The results of a recently released report pointed at relative stability in the pricing of Canada’s real estate in 2015, with an approximate rise of 0.6 per cent in the home affordability index by the final quarter of the year.