Housing in Vancouver became slightly more affordable in 2014’s second quarter, but prices remain well above those found in every other Canadian city.
Vancouver’s affordability for bungalows measure for bungalows in Q2 was 81.8%, which is down 0.3 percentage points compared with Q1. This number represents the percentage of a typical household’s pre-tax income goes toward the cost of owning a home, including mortgage, utilities and property tax.
The affordability measure for two-storey homes was 85%, down 1.3 percentage points. For condos, the number was 39%, representing a drop of 0.8 percentage points.
“Affordability in higher-priced housing markets benefits disproportionately from a fall in mortgage rates relative to lower-priced markets if all else remains constant,” said RBC senior vice-president and chief economist Craig Wright.
“This was the case in the Vancouver-area market in the second quarter, when a decline in fixed mortgage rates helped affordability across the board, despite prices recording some of the faster increases among Canada’s major markets.”
A comparison of the affordability index for major cities across Canada:
Across the province, bungalows rate at 67.0%, which is down 1.3 percentage points compared with the previous quarter. Two-storey homes are down 2 percentage points to 72%, and condos dropped 0.9 percentage points to 32.6%.
“British Columbia’s housing market experienced brisk activity in the second quarter,” Wright said.
“Home resales rose to a five-year high. Thankfully, the pace of new listings picked up sufficiently to keep the demand-supply equation in balance.
