Canadian home ownership costs have become the most expensive for the first time in 18 months
Canadian home ownership costs have become more expensive for the first time in 18 months, according to a report today by the Royal Bank of Canada.
Rising property values and a recent pickup in mortgage rates are at cause behind the numbers.
The decline in affordability was true in all major markets and in all types of housing, and follows steep declines since the spring of 2008. Yet despite the latest decline in affordability, it's still better than it was a year ago.
"The current levels in the RBC measures are in line with those in early 2006 when housing market activity was shifting into high gear in Canada," the report says.
The average rate on a five-year conventional mortgage went from 5.45 per cent to 5.73 per cent in the third quarter, according to the RBC. It was the first quarterly increase since last year.
The overall property market has also picked up.
"In markets such as Vancouver, which had been badly hurt last year, the turnaround has been nothing short of breathtaking," says the report. "In that market, as well as in parts of the Greater Toronto Area, bidding contests are common again."
