Canadian housing affordability slips in Q1 as Vancouver, Toronto dominate national measure: RBC Economics


  • A majority of local markets saw modest increases in home ownership costs relative to household income in the first quarter of 2016, making housing less affordable
  • Home prices continue to accelerate in Toronto and Vancouver, the nation's hot spots, further raising concerns about overheating in the single-detached market segments
  • Epic surge in Vancouver prices pushes RBC's Q1 affordability measure for the Vancouver area to 87.6 per cent, the worst ever recorded anywhere in Canada
  • Affordability for some or all housing categories improved in Regina, Saskatoon, Winnipeg, Ottawa and Halifax


TORONTO, June 22, 2016 /CNW/ - Housing affordability in Canada is sharply divided regionally, with developments in the sizzling Vancouver and Toronto markets moving the needle on national figures, according to the latest Housing Trends and Affordability Report issued today by RBC Economics Research.

In the first quarter, RBC's aggregate measure for housing affordability in Canada rose 0.8 percentage points to 47.1 per cent, the highest level since the second quarter of 2010. Deterioration in the Canada-wide condo apartment affordability measure was more modest, as it rose 0.4 percentage points to 35.4 per cent.

Housing affordability is the cost of owning a home at market price as a share of household income, so a higher number means housing is less affordable. Developments in Vancouver and Toronto continue to influence national readings, particularly in the single-detached category, because of the size of these two markets and magnitude of the increase in ownership costs that they experienced.

"There is no imminent end to this divided picture because home resale activity is very strong in Vancouver and Toronto and demand in both markets exceeds supply by a wide margin," said Craig Wright, RBC Chief Economist. "First-quarter prices for single-detached homes in Vancouver surged nearly 25 per cent year-over-year, and such a parabolic rise in prices signals the presence of over-exuberance in this segment of Vancouver's market that is not fully justified by the robust local fundamentals. In sharp contrast, we see balanced conditions in most other markets in Canada, which is likely to keep affordability within reasonable levels."

Vancouver is no longer the only housing hot spot on the West Coast. Home resales are booming in Victoria as well, and prices are rising rapidly, which has taken a toll on housing affordability in this area. RBC's aggregate affordability measure for the Victoria area market climbed by 1.0 percentage point to 47.4 per cent in the first quarter of 2016. This represented the third largest increase (after Vancouver and Toronto) among the Canadian markets that RBC tracks.

Buyers in Eastern Canada are benefiting from more affordable options. RBC's affordability measures for the Saint John, New Brunswick area are the lowest among all cities that it tracks in Canada. "It is more affordable for a Saint John buyer to own a single-detached home than it is for buyers in many large cities to own a condo apartment," said Wright. In Halifax, RBC's aggregate affordability measure in the first quarter fell to the lowest level since the mid-1980s.

More details regarding provincial and regional housing figures can be found in the attached fact sheet.

Royal Bank of Canada is Canada's largest bank, and one of the largest banks in the world, based on market capitalization. We are one of North America's leading diversified financial services companies, and provide personal and commercial banking, wealth management, insurance, investor services and capital markets products and services on a global basis. We have over 80,000 full- and part-time employees who serve more than 16 million personal, business, public sector and institutional clients through offices in Canada, the U.S. and 36 other countries. For more information, please visit‎

RBC helps communities prosper, supporting a broad range of community initiatives through donations, community investments, sponsorships and employee volunteer activities. In 2015, we contributed more than $121 million to causes around the world.


Image with caption: "Infographic highlighting findings from the Housing Trends and Affordability Report (CNW Group/RBC)". Image available at:

For further information: Craig Wright, Senior Vice-President and Chief Economist, RBC Economics Research, 416-974-7457,; Robert Hogue, Senior Economist, RBC Economics Research, 416-974-6192,; Catherine Hudon, RBC Communications, 416-974-5506,


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