The cost of owning a property in Canada became more affordable in the most recent quarter making homes in the country more appealing to overseas buyers. The Royal Bank reports that a slight decline in house prices and a rise in Canadian household incomes reduced the cost of owning a property.
With CanadaÃ¢â¬â¢s bank chief set to take over as the Governor of the Bank of England in 2013, we look at the stable and affordable property market in Canada.
Edmonton the most affordable place to buy property in Canada
The Royal Bank of CanadaÃ¢â¬â¢s affordability index for a detached bungalow stood at 42 per cent of income nationally in the second quarter. This means that an owner would need to spend 42 per cent of pre-tax annual income to pay for mortgage payments, utilities and property taxes. This represents a 1 per cent fall from the third quarter of 2011.
CBC News reports that the index fell even more for two-storey homes, by 1.2 percentage points to 47.8 per cent and eased 0.6 percentage points to 28 per cent for condos.
The bank attributes the increase in affordability to low interest rates, although it reports that the amount of income that households need to service home ownership costs continues to be higher than the long-term average.
Ã¢â¬ÅThe broad affordability picture has been somewhat stationary over the last two years, alternating between periods of improvement and deterioration, resulting in an affordability trend that is, on net, essentially flat," said RBC chief economist Craig Wright.
"The cost of owning a home took a smaller bite out of household pocketbooks in the third quarter as home prices fell Ã¢â¬â most notably in the Vancouver area, though it remains the least affordable market in Canada by a wide margin," explained Wright.
If youÃ¢â¬â¢re looking to buy a property in Canada, Edmonton is the most affordable city according to the RBC data. The index in Vancouver stood at 83.2 per cent of income, followed by Toronto at 52.4 per cent, Montreal 40.2 per cent, Ottawa at 38.7 per cent, Calgary at 38.3 per cent and Edmonton at 31.1 per cent.