Rising prices in Vancouver and Toronto pushed housing affordability closer to "risky levels" in the second quarter of 2015, according to a report from RBC.

Lack of affordability in Vancouver is at a record level, according to RBC's quarterly housing affordability report released Monday. It is approaching 1990 levels in Toronto, it says.

In the rest of the country, housing affordability remains largely unchanged and homes have become slightly more affordable in parts of Quebec and Atlantic Canada, according to the report.

​The bank warns house hunters in Vancouver and Toronto to expect more of the same later this year, with the supply of homes remaining limited and prices in "acceleration mode."

The problem is particularly acute for detached single-family homes, as demand continues to be high despite the rising prices.

Suburban house

The affordability of single-family detached homes is particularly poor in Vancouver and Toronto, RBC said. (CBC)

Vancouver's hot housing market shows no signs of slowing, the report said.

"The fact that Vancouver's affordability readings approach all-time highs for any market in Canada — albeit more so for single detached homes than condos — exerts little restraining effect on homebuyer demand at this stage. Given the current high degree of tightness in the market, further price acceleration and affordability deterioration are likely in the near future."

Toronto is seeing double-digit price increases and huge demand, pushing it "closer to risky levels," the housing report said.

"Affordability in Toronto is moving ever closer to the historically poor levels that prevailed in 1990, which may signal that risks are mounting because those were associated with a housing bubble at the time," it said.

A strong labour market, a steady inflow of migrants and low interest rates are keeping the market buoyant for now.

RBC estimates about 80 per cent of the pre-tax median household income is needed to carry a mortgage in Vancouver at current prices and just under 60 per cent for housing in Toronto. 

Condos more affordable

Condo affordability in those cities is not deteriorating at the same rate because prices are being kept in check by new supply.

In Toronto, especially, there has been a lot of new supply on the market for nearly five years, and that continued in early 2015, with the market flush with available units.

"This means that there remain more reasonably priced housing options in today's market, which was not the case in 1990," said RBC's report.

RBC believes housing markets across Canada are generally healthy, with prices set to rise about 4.6 per cent this year.

"Canada's housing market is poised to post one of its better years on record in 2015 despite the Canadian economy being hit by a significant negative shock [plunge in oil prices] and a spike in condo completions," its report says.

"Low interest rates continue to provide substantial stimulus for housing demand at this stage."

It is forecasting 505,400 homes will change hands, a five per cent increase from last year.

Uneven markets

But progress will be uneven, with sales in Alberta and Saskatchewan likely to drop, and sales in B.C. and Ontario rising rapidly.

Calgary, where home sales lagged in the first quarter because of the impact of low oil, saw fewer new listings and slightly stronger sales in the second quarter, RBC said. Housing affordability improved.

But the outlook remains uncertain.

"Owning a home in Calgary at market price remains more affordable than it has been on average since the middle of the 1980s; however, movements in oil prices are likely to exert a stronger influence on the market in the future," the report said.