Regardless of the various means and measures proposed and passed by the government to discuss outsized home price increase in Canada’s most in-demand housing market, the last quarter of last year saw Canadians house prices remain at hot levels. The affordability levels for the fourth quarter of last year was principally unaffected from the third quarter according to the latest Housing Trends and Affordability Report by RBC Economics Research.
The senior vice-president of RBC and head economist, Craig Wright said; “Owning a home at market price in Canada still took an abnormally large bite out of household income, but RBC’s aggregate affordability measure was unchanged in the fourth quarter after a string of six quarterly increases.” The affordability measure during the fourth quarter in the whole of Canada was 44.2 per cent, this has been seen as the most stressed level of home price in Canada since late 2008. In the third quarter, the affordability in Toronto aggravated from 63.8 per cent to 64.6 per cent.
Wright gave details saying; “Further policy intervention would be wise to cool surging home prices in Toronto, as the market has become disconnected with economic fundamentals. The last time affordability in Canada’s largest city was this poor, in 1990, the housing market subsequently fell into a deep and prolonged slump.” For the first time in over three years, Vancouver saw affordability improve from 84.8 per cent to 90.0 per cent in the third quarter. Potential buyers are still facing tough affordability problems in Canada.