Rising prices reduced housing affordability in the first three months of the year, RBC Economics reported today.

In its quarterly review of house affordability, the bank said the decline came about despite the strongest gain in pre-tax household income in about a year-and-a-half.

In its latest national report, RBC said a standard condo required 27.5% of pre-tax household income to service the costs of ownership, while a standard townhouse took 31.5%. A detached bungalow required 39% of pre-tax income, while a standard two-storey house was the least affordable class, consuming 44% of income.

Across the country, Saskatchewan witnessed the biggest drop in affordability — especially in Saskatoon — as demand from an influx of migrants exceeded the housing market supply.

“Two-storey homes were hit the hardest, as the province’s housing market jumped into a severe state of excess demand,” said Derek Holt, assistant chief economist at RBC, in an news release. “An influx of migrants, the sharpest quarterly gain in 25 years, complemented a pickup in wage growth and caught home builders off-guard, resulting in soaring prices and a rapid decline in affordability.

Holt cautioned that the staying power of the shift in migration is uncertain at its current early stage following 10 years of net population losses in Saskatchewan.

RBC said home affordability also declined in Alberta, Manitoba and Quebec.

There were some pockets of improvement in affordability across the country, namely in two-storey homes in B.C. and Atlantic Canada, and in bungalows in Ontario.