RBC’s latest housing affordability report released Thursday reveals that the situation is the worst its been since the early 1990s, and will worsen before it gets better.
RBC’s aggregate affordability measure for Canada went up 3.7 percentage points to 54 per cent in the first quarter of 2022, as home ownership costs rose across the country.
Housing Trends and Affordability – June 2022
- Sky-high prices and rising interest rates pummel affordability: RBC’s aggregate affordability measure for Canada surged 3.7 percentage points to 54.0% in the first quarter of 2022—the worst level of affordability since the early 1990s. Ownership costs rose in every market we track, though the degree of pain felt by buyers varies dramatically across the country.
- Situation in Vancouver, Toronto and Victoria reaches extremes: Becoming a home owner is now also very hard to achieve in other parts of southern Ontario and BC’s Lower Mainland.
- The Prairies and some east-coast markets still boast relatively affordable conditions: Despite deteriorating trends, buyers in these regions can still generally manage (albeit increasingly less so in Halifax).
- Affordability expected to worsen before getting better: The Bank of Canada’s ‘forceful’ interest rate hiking campaign will further inflate ownership costs in the near term, putting RBC’s national affordability measure on a path to worst-ever levels. However, we see the burgeoning price correction eventually bringing some relief to buyers. Property values, already slipping, are likely to fall more than 10% in the coming year.
Read the full housing affordability report: RBC Ecomomics – Focus on Canadian Housing