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A report by RBC Economic Research reviewed housing affordability in the third quarter of 2018 and concluded that it was “getting less affordable to own a home in Canada.”

The report tracks the income required to cover the cost of owning an average home with a 25 per cent down payment. When compared with the third quarter of 2015, the qualifying income had increased significantly by the third quarter of 2018.

In Vancouver, for instance, the income required to cover ownership of an average home was $211,000 in 2018, up from $127,000 three years ago. The qualifying income in Toronto was $187,000 in 2018 compared to $103,000 in 2015. In fact, the qualifying income had increased in all large and small housing markets across Canada.

One big reason for the higher qualifying income required in 2018 was the increase in housing prices since 2015, a rise that was most pronounced in Greater Vancouver and Toronto.

Qualifying incomes, therefore, increased by $34,000 in Vancouver and $27,000 in Toronto since 2015 as a result of higher prices, the RBC report estimated.

But rising prices were not the only factor. Even without their impact, the qualifying income would have climbed considerably because of the stress test that required the borrowers to qualify at a higher interest rate than the contracted rate as of January 2018.

The RBC report estimated that the increase in qualifying income due to the stress test was almost the same as the one resulting from the increase in housing prices.