Housing (relatively) more affordable

Metro Vancouver housing became more affordable in the third quarter of 2010, according to the RBC Housing Affordability Index.
Or rather, the unaffordability of Metro Vancouver housing became less severe, because the notion of “affordability” in Vancouver’s high-priced markets is always a relative term.
The latest edition of RBC’s regular report noted that in the third quarter of 2010, Metro Vancouver’s home ownership costs declined between 2.2 and 5.4 percentage points following five straight quarters of increasing costs.
That, report author Robert Hogue noted, was the biggest decline among major Canadian markets, “but is unlikely to change the perception that this is an expensive market to enter, because affordability remains very poor.”
The RBC affordability measure is a calculation that estimates what percentage of the median family income in each market would be required to carry all the costs associated with home ownership (including payments on a standard 25-per-cent down, 25-year mortgage, property taxes, utilities and insurance).
In Metro Vancouver, a standard bungalow, with a purchase price of $672,500, would require 69 per cent of that median income to carry all its costs, which is down 5.4 percentage points from the previous quarter.
The standard two-storey home, with a purchase price of $766,300, would require 78 per cent of that median income, down 4.7 percentage points from the previous quarter.
Metro Vancouver condos are the most affordable with the average price of $390,400 taking up 40 per cent of that median family income, which was down just 2.2 percentage points from the previous quarter.
For comparison, however, in Toronto a standard bungalow with an average price of $466,600 requires 47 per cent of that city’s median family income to cover ownership costs.
In Montreal, a typical two-storey home with an average price tag of $355,300 requires 51 per cent of that city’s median family income carry its mortgage, utilities and taxes.
In Calgary, the standard condominium with an average price of $246,700 needs 23 per cent of the city’s median family income to pay for it.
Relatively speaking, ouch.
In the report, Hogue said “such high ownership costs continue to weigh on demand, which remains fairly weak despite a modest pick-up in home resales in September and October.”
And across B.C. in general, Hogue noted that B.C.’s housing affordability measures are “significantly above long-term averages,”

Source: The Vancouver Sun