Even though Metro Vancouver’s real estate market has seen a significant slowdown recently, the affordability of both houses and condos has eroded, according to a study by National Bank of Canada.
The found that a mortgage payment for a median-priced single-family home in the Â鶹´«Ã½Ó³»Census Metropolitan Area – based on a set of parameters – was now 101.5 per cent of the region’s median household income. That’s up 2.7 percentage points over the previous quarter, a jump of 6.4 percentage points year over year, and the highest it has ever been.
National Bank said this erosion of affordability was “on the back of rising interest rates and falling income growth,” as median single-family home prices were down 0.7 per cent quarter over quarter and up just 1.8 per cent year over year.
In the condo sector, affordability is also at its worst-ever level, according to National Bank. It found monthly mortgage costs on a median-priced condo in the Â鶹´«Ã½Ó³»CMA now take up 49.2 per cent of the median household income, up 1.3 percentage points from the previous quarter and 6.3 percentage points year over year. That is the 14th consecutive quarterly deterioration in condo affordability in the region, said National Bank.
The bank also noted the widening affordability gap between homeownership and renting. Although Metro Â鶹´«Ã½Ó³»homeownership has long been more expensive than renting in terms of monthly cost, that expense has been offset by the enforced saving of paying down mortgage principal. However, the extremely high costs of homeownership in today’s market and the much wider gap between monthly expenditure is dramatically lessening the advantage of homeownership, according to National Bank’s figures.
National Bank found that across Canada, homeownership has historically been cheaper than renting, but has recently become more expensive.
In the report's look at the costs of owing a downtown condo in major cities across the world, Â鶹´«Ã½Ó³»came in 10th place, at US770 per square foot.
The National Bank study follows a , which found Â鶹´«Ã½Ó³»to be the second-least affordable housing market in the world. However, the Demographia report didn’t take square footage into consideration, and only examined cities in eight countries.
