A new report paints a bleak picture for homeowners in Victoria, as the costs of owning a typical home increased by almost 15 per cent in three years.
The Royal Bank’s (RBC) quarterly housing affordability report said that the share of pre-tax household income required to cover costs increased from 48 per cent in mid-2015 to 62.7 per cent in the first quarter of this year.
In general, RBC says increasing prices have “seriously hampered” buyers’ abilities to own a home in Victoria.
“Contrary to basic rules of economics,” RBC states, “rapidly rising prices didn’t attract more sellers into the market in the first quarter.”
Furthermore, the number of listed properties in the area fell by 22 per cent.
“It could be that current owners simply can’t afford to sell given how expensive their next housing options are,” RBC says.
RBC’s aggregate measure of affordability in the area has now risen for 11 straight quarters.
Across the Strait, Vancouver isn’t faring any better with an all-time high aggregate rating of 87.8 per cent.
“Clearly, current price levels are an impossibly high hurdle for many would-be buyers to clear,” RBC says.
Read the full report here.