4 March 2019

“The share of all Canadian households with their own homes is one of the highest among countries with advanced economies.”

The bank says such measures (including less strict mortgage stress test, increasing amortizations for insured mortgages or raising the allowable RRSP takeout limit for first-time homebuyers) will only provide a short-term help to homeowners and will have no impact on the problem of high household debt level.

According to RBC, those measures concentrate on raising demand and buyers’ purchasing power, and they alone may lead to even higher prices and a further deterioration of affordability in the future.

“Such measures alone will not affect the root of Canada’s housing issue – the gaps in the mix of real estate options in certain Canadian markets”, the report says. “In our opinion, the longer-term solution of Canada’s affordability crisis concerns first of all the supply”.

RBC says it’s not only the federal government’s responsibility, but all levels of government should work on this.

“Millennials in Vancouver and Toronto need more supply of affordable homes, and a wider mix of real estate options for purchasing or renting”, – the report adds.

Here are some other important results from the report:

• The highest homeownership rate among global cities was reported in Calgary (73%).
• Toronto (66.5%) and Vancouver (63.7%), the most expensive Canadian markets, still showed homeownership rates twice higher than in Berlin (37.2%) and Paris (33.2%).
• Montreal saw the lowest rate among Canada’s large cities (55.7%)
• Among those aged 35 and younger, the homeownership rate was the highest in Calgary (50.6%), and lowest in Victoria (27.4%).