Homeownership costs continued to climb steadily as Canada’s housing affordability sharply eroded across all four housing types in the second quarter, according to the latest Housing Affordability report released by RBC Economics on Wednesday.

“In the second quarter, Canada’s housing affordability experienced one of the largest and most broadly based quarterly deteriorations since the mid-1990s,” said Derek Holt, assistant chief economist, RBC. “Higher house prices, mortgage rates, utilities and property taxes all combined to drive the country-wide deterioration.”

The RBC Affordability report measures the proportion of pre-tax household income needed to service the costs of owning a home. All four housing classes eroded — the standard condo remained the most affordable during the quarter, requiring about 29% of income. A standard townhouse was next at 33%, followed by a detached bungalow at 41%. A standard two-storey home remained the least affordable housing type at 46%.

According to RBC, the effects were extensive as affordability eroded in every single housing class, in every province and in every major city across Canada. RBC notes that Saskatchewan, Alberta and British Columbia witnessed the most significant erosion in housing affordability. Affordability deteriorated by approximately 20% across each of the home segments in Saskatchewan, marking the worst quarterly deterioration on record. Over the past couple of years, Saskatoon, Edmonton and Calgary have suffered the largest deteriorations of all Canadian cities. Housing market conditions from Manitoba eastward are relatively stable compared to the western provinces.

Holt noted that the arrival of extended amortization mortgages has changed the dynamics of the housing market. The new-found ability to extend amortization up to 40-year mortgages temporarily offsets affordability pressures by rolling the clock back to late 2005 and early 2006 affordability conditions.

RBC’s Affordability measure for a detached bungalow in Canada’s largest cities is as follows: Vancouver 71%, Toronto 45%, Calgary 45%, Montreal 36% and Ottawa 31%.

Also included in the report are housing affordability conditions for a broader sampling of smaller cities across the country. For these smaller cities, RBC has used a narrower measure of housing affordability that only takes mortgage payments relative to incomes into account.

The Housing Affordability measure, which RBC has compiled since 1985, is based on the costs of owning a detached bungalow, a reasonable property benchmark for the housing market. Alternative housing types are also presented including a standard two-storey home, a standard townhouse and a standard condo. The higher the reading, the more costly it is to afford a home. For example, an Affordability reading of 50% means that homeownership costs, including mortgage payments, utilities and property taxes, take up 50% of a typical household’s monthly pre-tax income.