Housing affordability still ‘dreadful’ in Vancouver despite slight easing: RBC

Vancouver housing affordability saw some relief in the first quarter but still remains out of reach for most households, according to a new report from RBC

What happened: Latest measures reveal housing affordability easing slightly in Vancouver region

What it means: Even with some easing affordability remains out of reach for most households in the region

It’s still grey skies for housing affordability in Greater Vancouver despite some relief in the first quarter of the year, according to the Royal Bank of Canada.

RBC’s affordability measure calculates the proportion of median pre-tax household income required to cover the cost of mortgage payments, property taxes and utilities based on the average market price for single-family detached homes and condos.

The latest measure, released June 27, found that during the first three months of the year Metro Vancouver residents would on average have to devote 82% of their household income to afford a home.

That’s down 1.9 percentage points from the previous quarter and the third straight time the measure has eased.

However, the figure still dwarfs the rest of Canada, which saw a drop of 0.3 percentage points to 51.4%.

The next closest city to Vancouver was Toronto (66%), followed by Victoria (58.6%) and Montreal (44.3%).

Those figures are all for the aggregate market.

A single-family detached home in the Vancouver market comes in at 112.2% of household income — down 2.3% on a quarterly basis.

“Affordability is still dreadful in Vancouver,” the report from RBC Economic Research states.

“Only one in eight families earns the income necessary to manage ownership costs in the Vancouver area.”

The report acknowledged that policy-engineered market downturns have succeeded at reversing some of the earlier affordability issues in the region, but the authors emphasized the market still not close to levels ordinary Canadian households can afford.

torton@biv.com

@reporton