TORONTO - The cost of home ownership in Canada became more expensive in the third quarter, up for the first time in 18 months, a report by RBC Economics Research says.
RBC said Wednesday this hasn't happened since the spring of 2008 and was due to a slight rise in mortgage rates and higher property values.
"You've got much tighter markets in Canada and that's heating up prices," senior economist Robert Hogue said.
"So when you mix a slight increase in mortgage rates and higher prices, you end up with higher mortgage payments."
RBC measures affordability as the proportion of pre-tax household income needed to service the costs of owning a home.
During the third quarter, the benchmark detached bungalow moved up by one percentage point to 40.2 per cent and the standard townhouse rose by 0.7 of a percentage point to 32.3 per cent.
The standard condo climbed by half a percentage point to 27.6 per cent and a standard two-storey home increased 1.2 percentage points to 45.8 per cent.
Prices aren't expected to fall in the near term.
"Demand is still strong and that's a recipe to keep demand on an uptrend."
Consumers should take note that the current low interest rates are not going to hold and are expected to rise next year, Hogue said.
"It's not going to remain at this level forever."
