Housing price increases are expected to soften in 2008, improving the affordability of owning a home in B.C., according to the latest housing report by RBC Economics.
Slower demand will ease upward pressures on B.C. home prices. The report suggested that housing prices will increase 8%, compared with a 12% increase last year and an 18% increase in 2006.
B.C. will still retain the title as one of the least affordable provinces in Canada. The average cost of pre-tax income needed to service the costs of owning a home will remain high.
According to the RBC Affordability index, it takes B.C. owners about 67% of pre-tax income to own a detached bungalow, 71% for a two-storey home, 50% for a standard townhouse and 36% for a standard condo.
The study suggested that despite robust sales an increased supply of homes on the market should prompt housing affordability relief later in 2008.