Canadian housing was less affordable in Q2 for the twelfth straight quarter as mortgage interest rates continued to rise, National Bank said on Tuesday.
The decline in affordability affected seven out of 10 urban markets, the bank’s Housing Affordability Monitor said, as mortgage interest rates rose for the fourth consecutive quarter.
Victoria and Quebec City had the worst deteriorations in housing affordability, the report said, as home prices rose 9% and 2%, respectively. In contrast, a slowdown in the resale housing market in Toronto and Vancouver meant housing affordability in the former improved slightly in Q2, while affordability stayed the same in the latter.
In fact, home prices experienced their weakest gain in almost four years in Vancouver, while Toronto posted a decline, said the report. “That being said, both cities remain a painful environment for new homebuyers, and this is unlikely to change in the short term as central banks remain in a tightening mode,” it added.
In Q2, 57.1 months were required to save for a mortgage down payment (for a “representative home”) at a savings rate of 10%. That’s down from 57.7 months in the first quarter.
Read the report here.