Vancouver has record decline in housing affordability in first half of 2016: RBC

Vancouver home for sale
Report says skyrocketing prices for single-family detached homes are skewing housing affordability numbers in Vancouver. Photo by Jonathan Hayward/The Canadian Press

Royal Bank says the first half of this year marked the biggest six-month drop in housing affordability in the Vancouver area since at least the early 1990s.

The bank says its cost-of-ownership measure for Vancouver rose to 90.3 per cent of a typical family's pre-tax income after rising 6.1 percentage points in the second quarter and 6.6 percentage points in the first quarter.

The lender says that's the biggest back-to-back deterioration in affordability for the Vancouver area in 26 years of record-keeping.

RBC tracks how much of a typical family's pre-tax income would be required to cover monthly mortgage interest and principal payments, property taxes and utilities for two categories of housing in 14 urban markets across Canada.

It says Vancouver's overall numbers were skewed by rising costs for single-family detached houses while the cost of condos increased modestly over the second quarter.

Its latest report says the Toronto area had the country's second-biggest deterioration in housing affordability during the quarter, with its index of home ownership costs rising by 2.1 percentage points to 60.2 per cent of median pre-tax income.

RBC says most other major cities saw only a modest decline in housing affordability during the second quarter while the cities of Calgary, Saint John, N.B., and St. John's, N.L., bucked the trend with a reduced cost of ownership.

Overall, the Canadian cost of ownership was equal to 42.8 per cent of median family pre-tax income in the second quarter, up 1.2 percentage points since the prior quarter and 2.9 percentage points since the second quarter of 2015.

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