B.C. remains one of the most expensive places to purchase a home with affordability above long-term averages, but it is slowly improving, according to the latest report by RBC Economics.
Home ownership costs for detached bungalows moved down to 58.4% of pre-tax household income, falling 0.7% from the first quarter and 11.3% year-over-year.
Costs for a standard two-storey house have fallen 12.8% year-over-year to 64.4% of household income, falling 0.9% since the first quarter.
Costs for a standard townhouse and condos have fallen more modestly. It now takes 45.6% of household income to purchase a townhouse and 32.7% of income to purchase a condo.
The declines in homeownership costs have been a contributor to the huge comeback in resale activity in the first half of the year. Sales of existing homes more than tripled in July after falling to their lowest levels in about 19 years at the end of 2008.
Despite the declines, costs are still above the B.C. average. Average costs for a detached bungalow since 1985 is 48.5% of household income, 53.5% for a standard two-storey, 36.3% for a standard townhouse and 27.9% for a standard condo.
"The cumulative declines in homeownership costs over the past five quarters have been the sharpest since 1991, which has helped revitalize B.C.'s resale housing market," noted Robert Hogue, senior economist, RBC.
"Nonetheless, affordability levels are still above long-term averages, which suggests that affordability in B.C. has yet to be fully restored."