Home ownership costs increase across Canada except Alberta says RBC report

May 25, 2010, Home ownership costs increase across Canada except Alberta says RBC report

Owning a home in Canada has become even more expensive _ unless you live in Alberta, according to the latest housing report by RBC Economics Research.

The report, released Tuesday, says homeownership costs in Canada rose for the third straight quarter across all housing segments in the first quarter of 2010.

A strong real estate market and jacked up housing prices are getting the blame for putting a strain on Canadians’ bank accounts.

“Although home ownership became more costly in the first quarter of 2010, affordability measures are still moderately above the long-term average and below peak levels,” said RBC senior economist Robert Hogue.

“We expect affordability to deteriorate throughout 2010 and 2011, but this should be limited as more balanced supply and demand conditions will take much of the steam out of the housing market,” he said.

The RBC Housing Affordability report projects that the cost of owning a home will continue to rise.

The main contributing factor is an expected rise in interest rates, as the Bank of Canada moves towards raising the current exceptionally low rates to more normal levels through the second half of this year and in 2011.

According to the report, housing affordability measures in Canada are unlikely to exceed the peak levels reached in early 2008.

With the exception of Alberta, home affordability measures deteriorated across all provinces with a significant decline in affordability in B.C., Saskatchewan and Manitoba.

Housing affordability declined more moderately in Quebec, Ontario and Atlantic Canada.

Alberta is the only province to show a drop in the costs of owning a home.

By The Canadian Press

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