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( m: l' c9 D( l6 p6 a* ?ZT: Cost of home ownership continues to rise: RBC
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/ M9 c8 s$ T5 g q( vCanadian Press
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Wednesday, September 12, 2007
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) E k6 ^) K5 e( e/ \TORONTO — The cost of owning a home in Canada continued to climb in the second quarter as affordability in Western Canada showed the biggest change, according to a new report by the Royal Bank.; o' K% d0 `- H
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Saskatchewan suffered its worst ever quarterly deterioration of affordability on record, according to the bank, as an influx of people caught the housing supply off guard.4 Z* M" L: Q; v* A9 b
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“In the second quarter, Canada's housing affordability experienced one of the largest and most broadly based quarterly deteriorations since the mid-1990s,” said Derek Holt, assistant chief economist, RBC.! {+ s: m$ T9 ~$ F& y( V1 Y# `! [
. r& \3 R3 i0 i% [' A! q! c" _“Higher house prices, mortgage rates, utilities and property taxes all combined to drive the country-wide deterioration.”
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The report measures the proportion of pre-tax household income needed to service the costs of owning a home. The higher the reading, the more costly it is to afford a home
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The bank said a standard condo was the most affordable, requiring about 29 per cent of income compared with 27.5 per cent in the first quarter.
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A standard townhouse was next at 33 per cent, up from 31.5 per cent in the first quarter followed by a detached bungalow which increased from 39 per cent to 41 per cent in the second quarter.' [. X9 F1 [' k' D+ b( R5 z
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A standard two-storey home was 46 per cent, up from 44 per cent in the first three months of the year.9 Z! N% x$ w X" G$ h1 K
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Saskatchewan, Alberta and B.C. saw the biggest increase in costs in the quarter.' z! _9 O# ?4 A9 s
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Affordability fell about 20 per cent in Saskatchewan with no signs that prices were letting up yet, but the bank said the high prices were starting to weigh on demand.
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Among Canada's largest cities, a detached bungalow in Vancouver was the most expensive with the proportion of pre-tax household income needed to own a home coming in at 71 per cent. Toronto and Calgary followed at 45 per cent, Montreal at 36 per cent and Ottawa at 31 per cent.7 C6 P/ b' x7 i# Q
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“Market conditions in Vancouver have loosened up during the year, but conditions remain tilted in favour of a seller's market and are still supportive of fairly strong price gains,” the report said. |
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