Toronto is closing in on Vancouver as Canada’s least affordable housing market in the first quarter of 2017, according to a recent RBC housing affordability study.
According to the report, housing prices in Toronto are at their worst level ever while Vancouver has experienced minor relief in Q1.
RBC’s aggregate affordability measure for Vancouver dropped for the second consecutive time by 1.2 percentage points to 79.7% - meaning the average Vancouver household would have to spend roughly 45.9% of its income to cover the ownership costs for an average home bought in the first quarter of 2017. This is still the highest in the country even with policy implementations like the foreign investors tax.
The affordability measure for Toronto has surged more than one third since 2014, recently jumping 2.7 percentage points to 72% in Q1, the closest it has been to Vancouver’s measure in 14 years.
According to the report, Vancouver prices have already climbed back up to record highs in May.
Across Canada, the average affordability measure is 45.9%. Housing prices have continued to rise in Southern Ontario in places like Hamilton, St. Catherine’s and Kitchener-Waterloo as buyers seek more affordable areas outside the Toronto core.
A similar effect has been seen in Vancouver as affordability levels have driven buyers toward other markets like Victoria, which declined in affordability last year and in the beginning of 2017.
Victoria has had the most significant erosion of affordability among major Canadian markets. The RBC aggregate measure rose 1.1 percentage points to 56.7% in the last period, a seven-year high for the city.
Outside British Columbia and Ontario, affordability had marginal improvement in the Prairies and declined slightly in Quebec and the Atlantic provinces.
