Monday, September 27, 2010

RBC waves red flag over Vancouver housing market

RBC Housing Affordability declares Vancouver overpriced. Duh!

RBC waves red flag over Vancouver housing market

3 comments:

JimTan said...

Interesting, RBC is shifting to the position that a US-style crash is not a risk. Moreover, they keep comparing income to a two storey house!

Will someone inform them that the typical newbie buyer in metro Vancouver is hunting for a condo!!!!!!

“Housing becoming less affordable
Steve Ladurantaye
Globe and Mail Update
Published Monday, Sep. 27, 2010

Stubbornly high prices and modestly increasing mortgage rates means an increasing number of Canadians are unable to comfortably afford homes, according to Royal Bank of Canada...

The report said most Canadian cities don’t appear to be at risk of a U.S.-style crash, but “current levels of affordability suggest some greater than usual stress weighing on Canadian home buyers.”

The RBC Housing Affordability Measure shows the proportion of median pre-tax household income required to pay the principal and interest on a mortgage, property taxes and utilities. The figures assume a 25 per cent down payment and a 25-year loan at a five-year fixed rate.

In the second quarter, homes became 2.1 per cent less affordable on its scale.

The data shows Canadians spent 48.9 per cent of their household income to service the mortgage on a median two-storey home, an increase of 2.1 per cent over the first quarter.

While most cities are still below historical highs, Vancouver is showing “red flags.”

“Generally, we have dismissed the case of housing market bubbles in Canada, but the situation in Vancouver is probably the closest to one in the country,” the report stated.”

vibe said...

Interesting, RBC is shifting to the position that a US-style crash *is* a risk.

Fixed that for you.

Will someone inform them that the typical newbie buyer in metro Vancouver is hunting for a condo!!!!!!

Why not look at the price of cardboard boxes? Then we can have the most affordable city in the world!!!!!!

JimTan said...

Dear Vibe,

Just stick with the facts, and you will be alright.