RBC’s national housing affordability measure in Canada was little changed in Q2 (52.8%), posting its smallest improvement of 0.4 percentage point in almost a year, according to a report released on Monday.
"Ownership costs remained largely stable as a share of household income in most markets with Vancouver and Toronto still seeing more notable declines. Though modest, several Prairie and Atlantic markets saw their first increases in several quarters," said the report.
"Rising income boosted affordability nationwide as home prices stabilized from the prior quarter, and interest rates remained largely unchanged.
"Upward pressure on long-term interest rates and likelihood of Bank of Canada hikes next year could put ownership costs on the rise again after dropping significantly since 2024."
The RBC Housing Affordability Measures show the proportion of median pre-tax household income that would be required to cover mortgage payments (principal and interest), property taxes, and utilities based on the benchmark market price for single-family detached homes and condo apartments, as well as for an overall aggregate of all housing types in a given market.
Rising household income accounted for the entire affordability gain in Canada in Q2 as home prices and rates held fairly steady, it said.
