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. p* r5 h; y- I' d8 M* nZT: Cost of home ownership continues to rise: RBC- Y* R! D. s+ }7 q
; W7 w8 e0 e* a5 t2 e* sCanadian Press
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Wednesday, September 12, 2007) W* O: E$ U6 D+ L0 v( g
. l8 k W" D4 i' x; TTORONTO — 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.
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Saskatchewan 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.3 A2 ^4 G$ f# g* F% l
0 I1 z7 ]) f4 [. y3 ?# W' G“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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& g# B5 E( r$ N“Higher house prices, mortgage rates, utilities and property taxes all combined to drive the country-wide deterioration.”
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+ | @6 M4 f% xThe 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 home/ Q/ g8 @) b* e
5 j. D. Y9 a# S8 l4 W- `+ \; b4 pThe 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.( H! {7 z$ s0 z A
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A 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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( \4 @( f: g/ v4 P9 u' UA 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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4 l) ]1 u e; R" P" vSaskatchewan, Alberta and B.C. saw the biggest increase in costs in the quarter.3 g. @% M! ?% V+ M# f, M7 z c
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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.+ `+ f7 @0 c# G! v
8 ^" A3 e+ Y# [! qAmong 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 T9 d4 v( {8 W5 J% E# T' s" C
7 ~+ d2 |" v7 h" [- M“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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