Is Canadian Cottage and Home Ownership Affordable?
As the cry for affordable housing goes up across Canada, two recent studies tell us that affordability remains fairly constant for middle and upper income earners. Record-low interest rates have meant housing has been more accessible to modest-income buyers, but what will happen if interest rates climb? According to the Housing Affordability Index report, compiled by RBC Financial Group, “recent increases in mortgage rates have made home ownership slightly more expensive than last year, [but] housing continues to be affordable for Canadians and will remain so throughout 2002.” The Housing Affordability Index measures “the proportion of pre-tax household income needed to service the costs of owning a home in Canada.” The Index reached a three-year low of 30.6 per cent at the end of 2001 and has risen to 31.4 per cent in the first quarter of 2002. The Index is expected to hit 33 per cent by the end of this year, but report author, economist Carlos Leitao, does not believe this will adver
