The percentage of earnings being put toward home ownership costs in Canada is rising, a trend that is likely to continue, according to a Royal Bank of Canada report.
The bank’s quarterly survey revealed that home affordability fell in markets across the country in the first quarter — most visibly in Vancouver, where an estimated 72% of household income is required to pay the mortgage, property taxes and utilities on a bungalow.
Comparatively, home owners in Toronto require an estimated 47.5% of household income for the same expenses.
The report suggests that with expected increases in interest rates, owning a home in Canada is set to become an increasingly expensive endeavour.
The affordability readings on a standard bungalow in Canadian major cities were:
• Vancouver 72.1% (up 3.4 percentage points from the last quarter),
• Toronto 47.5% (up 0.8 of a percentage point),
• Montreal 43.1% (up 2.0 percentage points),
• Ottawa 39.0% (up 0.4 of a percentage point),
• Calgary 35.9% (up 0.9 of a percentage point)
• Edmonton 31.5% (up 0.5 of a percentage point).