The Royal Bank’s latest Affordability Index report shows that housing affordability in Saskatchewan may be slipping.
Every three months, the Royal Bank’s economics team puts out this Affordability Index for housing in the country. Basically, this index matches local incomes with local home prices to generate a ratio that measures affordability.
For a long time, Saskatchewan has always been the sweet spot on this one – with the best affordability in the country and exceptional when compared to Vancouver or Toronto.
Now, the affordability index says Saskatoon still has strong momentum but high interest rates are finally casting a shadow on the city. With the highest ratio in 15 years – 37 per cent – affordability has deteriorated in seven of the last eight quarters and buyers may start to push back on prices.
Regina is now the second-most affordable city in the country at 30 per cent even though prices softened a bit last year. But now we’re seeing tight inventories which is generating upward pressure on housing values.
But then there’s Vancouver where it takes 106 per cent of the average income to buy an average house.
