As Vancouver-area home prices continue to surge, "housing affordability is being crushed" there and "will likely deteriorate" further, RBC Economics says in a new report.
As it stands, ownership costs for detached homes run well above typical earnings, with costs equal to 119.5 per cent of median household income in the first quarter, RBC finds. That's nearly 10 percentage points higher than the previous quarter.
Dating back to 1985, financing in the detached category has never been this expensive, according to RBC's measure of affordability. While Greater Vancouver's condo costs grew pricier in the first quarter, they're still below record highs.
RBC's measure shows "the proportion of median pre-tax household income that would be required to service the cost of mortgage payments (principal and interest), property taxes, and utilities based on the average market price" of various dwelling types, and is based on a 25-per-cent down payment with a 25-year mortgage loan at a five-year fixed rate.
Editor's note: A prior version of this article said RBC's figures were for Vancouver. They are in fact for the Greater Vancouver Area. The article has been corrected.