Canadians experienced less financial strain to own a home in the final months of 2010, according to a report from Royal Bank of Canada.
On Thursday, RBC Economics Research said the affordability of home ownership improved in the final three months of last year for the second straight quarter.
However, it warned that this reprieve -- the result of lower mortgage rates and little rise in home prices -- is temporary.
RBC said the proportion of gross income needed to pay for home ownership — including mortgage payments, property taxes and utilities — fell 0.8 percentage points to 39.9% in last year's fourth quarter for a detached bungalow.
For a standard two-storey, the toll declined 0.4 points to 46%, and for condominiums, it was down 0.4 points to 27.6%.
Most major markets saw declines. For bungalows, the amount of income needed to own a home fell 0.4 points to 68.7% in Vancouver, 0.5 points to 46.8% in Toronto and 0.4 points to 41.3% in Montreal.
The declines were particularly pronounced in Alberta, which RBC said "officially became the most affordable provincial market in the country in the fourth quarter." The proportion of income needed for a bungalow fell 3.1 points to 34.9% in Calgary and 2.4 points to 31% in Edmonton.
RBC said improved affordability in Alberta was helped by lower prices as demand eased last spring and summer. However, RBC said with current rising demand and economic growth in Alberta, home ownership affordability will erode there, too, this year, as in other parts of the country.
