Sky rocketing Canadian home ownership costs will get worse.
The two cities with the highest costs are Vancouver and Toronto in that order.
Home ownership costs consist of a mortgage, property taxes and utilities.
The findings are contained in a report by the Royal Bank of Canada.
“From overheating to correction to the onset of recovery, we’ve seen pretty much everything in the past three years in Canada’s housing market,” economists at the bank say.
“Yet an eye-watering loss of affordability has been a constant.”
In Vancouver it took 88.4 per cent of household income to cover homeowners costs.
For Toronto the number was 75. 9 per cent.
For all of Canada it totalled 54 per cent.
That’s up from 43 per cent of three years ago.
“We expect the Bank of Canada to proceed with further rate hikes that will raise its overnight rate from 1.50 percent currently to 2.25 percent in the first half of 2019,” the report says.
“This will keep mortgage rates under upward pressure and boost ownership costs even more across Canada in the period ahead.”
Sky Rocketing Canadian Home Ownership Costs
And there is more bad news for the Canadian real-estate sector.
Toronto and Vancouver are among the biggest property bubbles in the world.
What does that mean?
Housing bubble is defined as homes prices that are overvalued and are at the greatest risk of collapse.
The report also notes it takes nine years salary to buy a house in Vancouver.
And more than six years for Toronto.
The findings are contained in a report by the Swiss investment bank UBS.
And the Toronto and Vancouver rankings mean that house prices are more pronounced than in expensive cities such as Paris and San Francisco.
UBS looked at 20 cities around the world.
Vancouver has long been subject to real estate frenzy for some time.
A lot of it due to organized crime manipulating prices.