Home sweet home? - Macleans.ca

Home sweet home?

Housing affordability is deteriorating as prices remain stubbornly high

by

Steve White/CP

Canada’s hot housing market may be cooling off, but that doesn’t mean owning a home is about to get any cheaper. A study this week by the Royal Bank of Canada suggests that affordability continues to deteriorate across Canada, placing “greater than usual stress” on homebuyers. The problem is that, while interest rates are rising and fewer people are buying, housing prices haven’t budged because fewer homes are being put on the market. RBC says the situation doesn’t present an immediate threat for most of the country, with the possible exception of Vancouver where hikes in mortgage rates are amplified by a greater disparity between home prices and income levels. “Generally, we have dismissed the case of housing market bubbles in Canada,” the report said. “But the situation in Vancouver is probably the closest to one in the country.”