West Coast home buyers who want the best value for their money may want to look east.
A new report by RBC Economics states that the “most affordable” housing markets in Canada are found in the Atlantic and Prairie provinces.
The bank uses a housing affordability measure, which gauges the cost of homeownersip over median household income.
A low score means greater affordability compared to a higher number.
Using this measure, RBC Economics identified Saint John in New Brunswick with the lowest score of 23.1 percent, which means it’s the most affordable place to buy a home.
St. John’s in Newfoundland and Labrador came second with 24.2 percent.
Regina in Saskatchewan placed third with 26.1 percent.
Though it may no longer come as a huge surprise for many, Vancouver fared the poorest.
The biggest city in B.C. by population got a score of 78.8 percent.
Toronto came second to Vancouver, with 67.6 percent.
Victoria scored 55.3 percent, placing third.
“All three are Canada’s priciest markets,” RBC economist Robert Hogue wrote in a report Monday (March 29).
The bank economist also noted that Montreal and Ottawa, with scores of 43.5 percent and 40 percent, “now pose a higher degree of strain for buyers”.
Nationally, RBC’s aggregate measure increased 1.3 percent to 50.3 percent.
Hogue noted that that’s where it stood before the COVID-19 pandemic started last year.
This means that whatever affordability gained when housing markets slowed down has been eroded by current “red-hot markets”.
“The near-term outlook is grim for home buyers,” Hogue wrote.
Prices are expected to increase, making prospects for buyers “even more challenging”.
“It’s now overheating in many parts of the country with property values soaring beyond historical norms,” Hogue wrote.
Hogue added, “With demand so strong and inventories so low (with some exceptions), odds are prices will continue to rise in the near term, driving up ownership costs alongside. We expect affordability pressures to build further—possibly significantly more.”