Climbing house prices in Canada continue to outpace income growth, says RBC Economics.

In its latest Housing Affordability Index, RBC says Canada’s housing affordability conditions deteriorated for the fourth consecutive quarter. But RBC economist Derek Holt says after three consecutive quarters of sharp deteriorations in affordability, the pace slowed for all home classes in almost every region of the country.

He says Alberta’s housing affordability was the lone exception with the steepest drop in affordability, but he says Alberta will probably join the rest of the country next year as the market is shifting away from excess demand.

Holt says affordability will likely start improving next year on the lagged effects of fourth quarter mortgage rate declines, easing energy price pressures and a topping out of home price appreciation.