A new report from RBC says short of a housing crash that would "destroy property values" in Canada, it will take years and concerted efforts to restore affordability.

The second-quarter report on housing affordability lays out some dire conditions across the country and warns "any progress in restoring housing affordability is likely to be slow."

According to RBC, in order to see any sort of difference in the current housing situation, supply needs to increase by giant leaps.

But the bank says that doing that will take a long time and even if new homes are built, the rising construction costs could still result in Canadians being priced out of the market.

The dream of home ownership remains out of reach for many

As Canadians across the country deal with high interest rates and real estate prices, the report suggests buyers will continue to deal with "extremely difficult affordability conditions."

"We believe those pressures are behind the notable cooling in home resale activity we saw this summer in Ontario and British Columbia. They are poised to weigh on demand for months to come in both regions, with many buyers entirely priced out in Vancouver and Toronto," reads the report.

RBC says we are still seeing the effects of the sharp erosion of affordability from the pandemic playing a role.

What's the situation with major housing markets in Canada?

Vancouver

Any hopes for any improvement in affordability were dashed as the market rebound in the second quarter sent home prices climbing at a rapid clip again after soaring interest rates saw prices drop the previous year.

Calgary

According to RBC, Calgary is apparently the hottest housing market in the country right now. The bank says inventory is at a 15-year low and that "home resales [are] running at the pre-pandemic peak" and as buyers compete fiercely for the little inventory that is available.

Edmonton

We’re not in Calgary… The situation is Edmonton is quite different as there seems to be "plentiful inventory" that is resulting in a "calming effect" on price negotiations.

Toronto

RBC says Toronto has more in common with the situation in BC than Alberta right now. There is "no material relief" in sight in Toronto and RBC says "the dream of owning a home remains far out of reach for ordinary folks." 

Interest rates seem to have ignited resale activity in the spring, but RBC is predicting "a more subdued tone" in the months ahead.