Houses more affordable in Ontario, says RBC.
August 31, 2005 - Housing is becoming more affordable in Ontario.
RBC Economics says its Q2 housing affordability index has moderated, thanks to anunexpected decline in mortgage rates. The index measures the proportion of pre-tax household income required to own a home.
According to the index, a single-family detached bungalow will eat up 34.8 per cent of income, while a standard two-storey home is even less affordable at 40.9 per cent of income. However, a standard townhouse absorbs 28.9 per cent of income and a standard condo less than 25 per cent.
"Ontario's house price appreciation continues to be modest compared
to other parts of the country," says RBC economist Allan Seychuk. "Income growth was also modest, while taxes and utilities costs continue to rise. Fortunately, these negative trends were offset by the unexpected decline in mortgage rates, resulting in improved affordability overall."
The report concludes housing affordability improved for Ottawa homeowners, as "relative calm" returned to the market. All four housing types witnessed a strong quarter with two-storey homes and condos experiencing the larger gains in affordability. The Ottawa market is facing modest price appreciation as housing starts and resales are in line with long-run per capita levels.
RBC's affordability index for a detached bungalow in Vancouver stood at 55.3 per cent, while in Calgary it was 32.8 per cent.
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