This is coupled by ever-higher benchmark home prices in Canada's largest markets
In its latest earnings report, Royal Bank of Canada said that a major driver of its strong fiscal Q2 performance was the growing proportion of its higher-earning clients.
However, this seems to be to the detriment of the country’s hopeful home buyers, according to Neil McLaughlin, head of RBC’s personal and commercial banking unit.
“We’re seeing the overall income and net worth of a mortgage buyer increase over time,” McLaughlin said in a conference call with analysts.
With this trend emerging as “a bit of a systemic issue,” McLaughlin said that first-time buyers are “becoming less and less a part of our portfolio.”
Read more: First-time buyers in Canada – will the landscape improve in 2022?
Despite the national home price index ticking down by 0.6% to $866,700 in April, benchmark prices in Toronto and Vancouver significantly exceeded $1.3 million during the month, representing five-year increases of 65% and 40%, respectively.
“It is a bit of a sad commentary in terms of young people being able to get into some of these markets,” McLaughlin said.
RBC reported net income of $4.3 billion for the quarter ending April 30, representing an annual increase of $238 million (6%).
“We remain well-positioned for future growth, and to deliver differentiated long-term value for our clients, employees and shareholders. At a time when geopolitical tensions, inflationary pressures and global supply chain issues are creating an uncertain macroeconomic backdrop, I’m proud of how RBC employees continue to drive positive change in our communities and deliver trusted advice and insights for those we serve,” said Dave McKay, president and chief executive officer of RBC.
