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ZT: Cost of home ownership continues to rise: RBC
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Canadian Press: U9 I8 }9 v0 G( v& `" p* Y f
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Wednesday, September 12, 2007: p$ X1 e. | |- c9 A( l& o% y8 P
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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.* C( u: J& B- C8 t' Y, r# u) Z
# o z g! W9 k! Y) ~4 O dSaskatchewan 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.
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% I) g5 E; d f3 R- m" Z; @$ o% |“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.
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“Higher house prices, mortgage rates, utilities and property taxes all combined to drive the country-wide deterioration.”
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, i9 `; k2 j: q* j8 [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 home6 V' y5 y2 I* r' o" o8 `
. y d& o' c3 h2 n1 `8 ]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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7 C9 L) [" D* h4 u0 W9 q! }( iA 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.
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, z) [, ?1 R- ]* D' pA standard two-storey home was 46 per cent, up from 44 per cent in the first three months of the year.
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Saskatchewan, Alberta and B.C. saw the biggest increase in costs in the quarter.
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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.5 {- w0 J! z% z/ s4 r- H1 y
. C' c2 P7 e8 uAmong 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 ]2 O# Z# b+ D1 d
1 }" o3 c- H& P- f" S- y& ?“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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