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August 23, 2021

Is home ownership getting out of your reach?

The cost of home ownership in Canada is on the move again.

House The proportion of pre-tax income required to handle the costs of owning a home jumped last quarter for all types of housing tracked by RBC Economics housing affordability index.

The biggest jump was once again in Vancouver with the cost of mortgages payments, utilities and property taxes for a bugalow coming in at close to 93% of a typical household’s monthly gross -- up 10.4 percentage points from the previous quarter.

In Montreal, home ownership cost roughly half that eating up 43% of a typical family’s income, up 1.4 percentage points from the first quarter. Other major cities in the survey include: Ottawa (41%), Calgary (37% and Edmonton (34%)

In other words, no matter where you live, it's going to take at least half your income to get going.

It's not all bad news, however. While economists had predicted that the Bank of Canada would start raising interest rates this summer, RBC expects that rates will remain at the current one per cent until the middle of next year.

It’s far easier to find a new place to rent than to have to go through the trials of buying a home. But that's not stopping hordes of people trying to get on the first rung of the property ladder. But do you expect to be one of them?

Does buying a house still figure into your plans for the future? Or is the idea simply getting out of your range? 

By Gordon Powers, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...