Affordability in Question

Bag-Of-Money 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.

Source:  Canada.com and Vancouver Sun (2nd Story)

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