Home ownership is getting more affordable
Housing affordability improved in Canada during the last three months of 2011, Royal Bank of Canada said in a quarterly report Wednesday.
RBC said the financial burden of owning a home declined for the second straight quarter in last year’s fourth quarter, thanks to “softer” home prices and higher incomes.
That countered the deterioration of home affordability seen in the first half of last year, largely because of a rapid run-up in prices in the Vancouver area.
“As a result, the cost of owning a home at market price represented slightly less of a pinch on household budgets in the fourth quarter,” RBC chief economist Craig Wright said in a statement. “Continued low interest rates in 2012 will help keep housing costs at bay in the near term.”
The average proportion of pre-tax household income needed to own a standard two-storey home was down 0.8 of a percentage point to 48.1% nationally in the fourth quarter, RBC said. For detached bungalows, it was down 0.6 point to 42.2%, and for condominiums down half a percentage point to 28.5%.