The cost of owning a standard detached bungalow in Vancouver now devours 82 per cent of a typical household’s income.
That calculation, from RBC Economics Research, is among the findings in its recent housing trends report showing home affordability has taken a hit in B.C. in recent months.
RBC’s home affordability measure compares home ownership costs – mortgage payments, utilities and taxes – to median pretax household income and provides plenty of fodder for those who think B.C. real estate costs too much.
The Vancouver measure of 82.2 for a bungalow is up 2.2 points from the previous quarter and is far above Toronto’s 54.5, Montreal’s 38 and Calgary’s 33.
The measure for B.C. as a whole also rose to 67.6 for bungalows, 72.8 for two-storey homes and 33.8 for condos.
In Vancouver, owning a two-storey home took 85.8 per cent of household income, while a condo took 40.7 per cent.
“The weakening in affordability is a bit disappointing and the latest setback disrupting the way to healthier housing market conditions in B.C.,” RBC chief economist Craig Wright said.
But despite the recent uptick in prices, Wright noted home ownership costs in B.C. are still lower than a year ago, due to a nearly two-year long cooling stretch in the real estate market.
Fears of a steep drop in Vancouver real estate appear to have abated, he said, suggesting the “market correction has run its course and that the risk of a catastrophic outcome has greatly moderated.”