Good news for landlords. Buying and servicing a home in Canada is increasing, and that obstacle may prove enough for buyers to hold off from entering the market for now.

According to the new RBC report on affordability, it is estimated that a household has to devote over 40 per cent of its pre-tax income to service the cost of owning a bungalow at current market values.  While the cost of servicing a condo increased marginally, it still accounts for almost 30 per cent of pre-tax income.

While the Bank of Canada says they will raise interest rates gently upwards in 2015, many first-time buyers are still paralyzed by fear of a major hike and affected by negative media coverage surrounding the country’s economy.

“Going forward, affordability could become a deterrent for homebuyers in this country if it were to deteriorate much further due to, for example, a surge in interest rates,” says the report.

Affordability is a problem across all Canada’s markets, says RBC, with most of the deterioration occurring in single-family home categories.  Vancouver and Toronto were naturally the worst for affordability, while Alberta and the Atlantic region “still looked reasonably attractive for the most part in the third quarter.”

“We expect home resales to stabilize near the current not-too-hot and not-too-cold levels, although some further modest pullback may occur in the near term,” says RBC.