RBC says home affordability to deteriorate with rising mortgage costs
OTTAWA - The Royal Bank of Canada (TSX:RY) says the ability of Canadians to keep up with housing costs has actually been improving of late, but warns against complacency.
The Royal Bank's latest housing affordability measure shows home servicing costs relative to incomes actually fell in the last three months of 2013, bucking the deteriorating affordability trend of the previous two quarters.
But the relief will be temporary, the bank says in a new report, because mortgage rates are due to start rising this year.
In the fourth quarter, the bank estimates maintaining a detached bungalow at current market prices across Canada would have taken up 43.1 per cent of average household income, while the cost of a two-storey home would have claimed 48.7 per cent.
Both measures are 0.2 points lower than in the third quarter.
The RBC index represents the percentage of pre-tax household income that is needed to service the cost of owning a home at current market prices, including payments for a mortgage, utilities and property taxes.
Read more Business News
- Power outage pastimesWest Kelowna
- Conserve waterWest Kelowna
- Students rally for classmateVernon / N. Okanagan
- Garage goes up in flamesCentral Okanagan
|QHR Technologies Inc||1.22||-0.04|
|Anavex Life Sciences||0.1804||-0.0036|
|Copper Mountain Mining||2.29||-0.13|
|Sunrise Resources Ltd||0.065||+0.045|
|Mission Ready Services||0.31||-0.01|
Investors seeking income often limit their selection to bonds and give little or no consideration to preferred shares. They usually ignore preferreds simply because they don't know much about them...
Part 2 of 2 to read Part 1, click here. 5. Dial down your vacations. New York is out. Maybe Buffalo. For West coast, maybe Seattle instead of Hawaii. Use sites like Airbnb (aribnb.ca) to find ch...
Niche food producer “Sweets from the Earth” thrives using innovation, uniqueness and an unwavering focus on quality. A neighbour’s stew turned Ilana Kadonoff off meat at the age of s...