Home ownership more affordable: RBC

New research by the Royal Bank suggests that despite concerns about household debt, home ownership is becoming more affordable.

RBC says home affordability actually improved in the final months of 2011 for the second consecutive quarter, thanks to softening prices and income gains.

Owning a home in Canada now takes up as much of pre-tax income as it did a year ago, even though household indebtedness is now at a record high 153 per cent of disposable income.

Ownership even became more affordable in the ultra-expensive Vancouver market, although it remains the most expensive place in Canada to own a home.

Next highest is Toronto followed by Ottawa, Montreal, Calgary and Edmonton.

Earlier this week, Finance Minister Jim Flaherty warned Canadians again about taking on too much debt because interest rates will go up some day.

In a forecast issued Monday, the Canadian Real Estate Association said it expects the average price of a home to decline by 1.1 per cent this year to $359,100, while resales rises a tiny 0.3 per cent.