OTTAWA -- Owning a home in Canada is starting to get more expensive as mortgage rates edge higher and house prices rebound, according to a report by RBC Economics Research.

The proportion of pre-tax household income needed to maintain a home rose in the third quarter of this year for the first time since the spring of 2008, and across all housing types, RBC said Wednesday.

The cost of owning a typical detached bungalow increased 1% from the previous quarter, the report said. A standard townhouse rose 0.7%, while a regular condo edged up 0.5% and a standard two-storey home increased 1.2%.

“Home affordability deteriorated in all provinces and major markets in Canada due to a slight rise in key mortgage rates and appreciation in property values,” said Robert Hogue, RBC’s senior economist. “Despite this increase in home ownership costs, affordability measures have still shown improvement from a year ago.”

RBC said an average detached bungalow -- the index benchmark -- works out to 66.8% of pre-tax household income in Vancouver, 48.6% in Toronto, 39.2% in Ottawa, 37.5% in Montreal and 36.7% in Calgary.

“With such strong momentum in the housing market and the cyclical low in mortgage rates behind us, it seems unlikely that affordability will improve in the near future,” Mr. Hogue said.

“The housing market still faces obstacles, as mortgages have become more difficult to handle for many Canadians amid challenging labour conditions,” he said. “This is likely to persist until the economic recovery is well established and job creation is sustained next year.”

Home ownership costs include mortgage payments, utilities and property taxes.

Canwest News Service