Home affordability falls in Canada

High Canadian property prices and utility costs have reduced housing affordability amongst Canadian residents to its lowest level in a decade, according to a report by the Royal Bank of Canada (RBC).

RBC's latest housing affordability index, which measured the proportion of pre-tax household income spent on housing costs said:

Derek Holt, the Royal Bank's assistant chief economist said: "This (housing affordability) was unable to offset increases in mortgage rates, house prices and utilities costs"

Housing affordability is reported to be worst in Vancouver and Calgary, where price gains have been strong.

Spanish property prices may rise by 10% in 2006

Spanish bank La Caixa, forecasts that Spanish property prices will rise on average by 10% in 2006. If correct, this will represent a real increase of around 6% in Spanish property prices, after adjusting for national inflation of around 4%. However, any capital gains may well prove short-lived.

Jordi Gaul, La Caixa's director of research, said: "In the next few years Spanish property prices may even rise below inflation, which in real terms means that property prices would fall, as happened in the years 1993 to 1996".

New Italian law to help buyers

A law is to be introduced this month that will protect private property buyers in Italy against bankrupt builders, according to reports in Italy.

A contract is now only valid, if the construction company in question can prove that they are financially stable, provide a bank guarantee for the price of the property, include a full list of all building materials used and supply a ten year building insurance.