RBC says it takes about 27.5% of the average Canadian’s income to afford a condo, and 44% to afford a typical 2-story home. A typical bungalow in Vancouver costs 68%!
Is this a housing danger sign? Maybe not. Incomes grew faster than Vancouver house prices in the first three months of this year.
Then again, maybe it is a warning. RBC’s calculation methods are rather optimistic. For one thing, their numbers exclude property taxes and utilities. In addition, RBC’s figures are based on a 25% down payment. Fewer and fewer people in high-priced markets can afford 25% down these days.