Metro Vancouver housing affordability nears worst ever seen in Canada

Housing affordability in Metro Vancouver is nearing the worst level ever seen in Canada, RBC Economics says.In a news release issued this morning, RBC Economics' Housing Affordability Index for B.C. showed a 2.5 percentage point increase in the second quarter of 2015, to 75.3 per cent, for two-storey homes.The index, which captures the proportion of pre-tax household income needed to service the costs of owning a home, rose the most for B.C. among all provinces.The measures increased by 2.1 percentage points to 71.4 per cent for bungalows, and by 0.4 percentage points to 33.3 per cent for condos."Poor housing affordability at the provincial level, particularly in the single-detached home segment, is a reflection of the extreme situation in Vancouver," said Craig Wright, senior vice-president and chief economist, RBC."That said, deteriorating affordability did not pose any issue for home resale activity in the second quarter. In fact, the resale market was on a roll across most of the province, including: Vancouver, Victoria, the Fraser Valley, Chilliwack and Kamloops, and we expect B.C. home resales to rise by more than 20 per cent overall in 2015 - the highest increase in the country by far."Vancouver's housing affordability readings are nearing the worst levels ever recorded in Canada, but this is still not reining in buyer demand at all," Wright said. "Given the current high degree of tightness in the market, further price acceleration and affordability deterioration are even very likely in the near term."