'Even though we've seen prices rise more slowly, they're still rising,' says an RBC economist

It's never been this bad in any Canadian urban centre, says an economist

VANCOUVER (NEWS 1130) – If you’ve been getting the sense our real estate market has been getting even more unaffordable over the past year, you’re right.

It now takes 88 per cent of median household income to manage the costs of owning a home, according to a major bank.

Seventy-eight per cent of median household income was needed to cover the mortgage, utilities and property taxes 12 months ago. But now these costs are up 10 points in our region, according to this report from RBC Economics.

It’s never been this bad in any Canadian urban centre, according to Senior Economist Robert Hogue.

“It does go to show that those arguing that there is a crisis — that affordability is in a crisis — certainly, our numbers seem to corroborate that,” says Hogue.

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Hogue adds the situation isn’t likely to improve soon, with RBC Economics projecting that interest rates will rise.

“That’s the unfortunate part of these conditions,” says Hogue. “We just don’t see them really improving going forward. We expect interest rates to continue to rise going forward.

“In the case of the Vancouver, even though we’ve seen prices rise more slowly, they’re still rising. So that combination of the likelihood of further interest rate increases — and prices still rising, albeit at a slower pace — puts further pressure on housing affordability, and first-time home buyers in particular.”

Higher mortgage rates are contributing to this erosion on a national level. When averaged out across the country, 48 per cent of median household income is required to manage home ownership.

In Toronto, three quarters of median household income is required to own a home. In Victoria, we see that figure at 63 per cent.