Homes getting less affordable for many Canadians

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It took 84.2 percent of an average household’s pretax income to maintain a home in Vancouver, B.C., during the third quarter, up two percentage points from the previous quarter, according to a new report on housing trends and affordability issued by the Royal Bank of Canada.

Vancouver is one of the priciest housing markets in the world, but a home in Toronto also required 55.6 percent of the average household’s income, compared with the 48.9 percent average for the nation as a whole, the Toronto Star reports.  Other markets were closer to historic norms: Montreal (38.3 percent), Ottawa (37.3 percent), Calgary (33.7 percent) and Edmonton (32.9 percent).

A sharp rise in interest rates would pose a further threat to affordability, but RBC analysts think bond yields and mortgage rates will increase “gently” in the next year or so. Source: