Vancouver's house prices "more affordable" but still "exorbitant"

Low interest rates are beginning to have an impact on the cooling housing market. That and the growing threat of unemployment in the plummeting global economy, says a report from Canada's biggest bank, Royal Bank of Canada.

Vancouver housing is becoming more afforable. The report offers a table of sample properties: a detached bungalow in Vancouver at the end of last year would have cost $576,300, for those with a qualifying income of $126,300. It cost 70% of the average household income to own that bungalow in Q4 2008 versus 75% of household income in the 3rd quarter of last year.

As you might expect, coverage of RBC's release has provoked a mixture of irritation and sarcasm on the comments boards. There's apparently legions who can't and don't own property in Vancouver because it costs too much. No chance of the shocking Detroit meltdown to $1 houses here...

However, the general picture is not good for B.C. homeowners. "Housing markets remain under heavy downward pressure in British Columbia," the report states, citing rising unemployment as a cause for weakening housing demand.

The report goes on to suggest that affordability province-wide has improved since the market peaked in the Summer and stability is being restored to the market.

But it cautions:

"Still, the restoration process has much further to go as measures remain significantly worse than historical averages."

RBC's verdict on the direction for Vancouver home prices: "that things continue to be tough in the Vancouver housing market would be an understatement... the cost of homeownership in Vancouver is still exorbitant both in absolute terms and relative to income or rent."

Look out below.