Housing prices has gone higher in Toronto and Vancouver. The Royal Bank of Canada says that housing affordability has been closely advancing to risky levels as the prices has gone higher.
CBC reports that RBC has released on Monday its quarterly report on housing affordability.The data shows that lack of affordability in Vancouver is already at a record level while it is approaching 1990 levels in Toronto. As for the other parts of Canada, the housing affordability continues to be largely unchanged. However, there are some areas of Quebec Province including the region of Atlantic Canada that have homes which are somewhat affordable.
It has already been forecasted since the housing supply remains limited and the prices is already in "acceleration mode." Thus, RBC have warned house buyers in Toronto and Vancouver to anticipate more of housing prices increase.
Another pressing problem is the detached single-family homes which is "particularly acute" yet demand stays higher regardless of rising prices. "The affordability of single-family detached homes is particularly poor in Vancouver and Toronto," RBC said. It is also reported that the hot housing market in Vancouver has no sign of slowing down.
Globe and Mail affirms the previous report that based on the latest analysis of housing trends, housing prices in Toronto and Canada will continue to surge due to its lack of supply of detached homes in the market. Though, in other Canadian market the supply and demand are more balanced, which "affordability has been close to the long-term average since 1985."
In a different note, it is also expected that there would be "a decline in Canadian borrowing rate in the 1st half of 2015 will likely boost demand into the early fall, but then have a waning effect in the late stages of this year." The low-rate environment would help keep housing markets "humming in hot markets and reduce the impact of low commodity prices in other markets," especially in Alberta and Saskatchewan.
TD Bank also added that commodity-dependent regions like Calgary, Edmonton, Regina and Saskatoon have reduced substantially until now, "but to a lesser degree than was originally anticipated." In other places of Canada like Montreal, Ottawa and Quebec City, the markets that have set on "soft landings" throughout the past years.
