Vancouver remains the worst place in Canada to afford a house despite slumping prices, says a report from the Royal Bank of Canada (RBC).
The costs of owning a detached bungalow in Vancouver take up 82.3 per cent of household income, while a standard two-storey home takes up 87.2 per cent, despite housing prices reaching 10-year lows, the bank's May 2013 Housing Trends and Affordability report shows.
"Extremely poor housing affordability in the Vancouver area still weighs heavily on homebuyer demand despite recent improvement, including in the first quarter of 2013 when most of the RBC measures declined slightly," the report reads.
The bank notes that Vancouver home resales fell to 40 per cent below their 10-year average in 2012, leading analysts to wonder whether the city might reach the lows it hit in the 2008-09 recession, when resales fell to 57 per cent below the 10-year average.
RBC also warns that the city's housing prices could slide even further than they have already, as buyers maintain the upper hand in the real estate market.
Meanwhile, housing in British Columbia overall is slowly becoming more affordable as the costs of owning bungalows and two-storey homes take up a smaller proportion of people's income. However, with bungalows taking up 65.9 per cent of people's income and two-storey homes taking up 71.3 per cent, they remain the least affordable in Canada.