CALGARY - Home Ownership remains within reach for most Canadians but is getting increasingly difficult for families with household income less than $50,000, finds CIBC World Markets Inc.'s new Home Ownership Affordability Index.

Canadians spend 15.6 per cent of their average gross personal income on mortgage payments, which is about the same as 10 years ago, said the report. But when adding in hydro bills and property/municipal taxes, it rises to about 22 per cent of gross income.

"The vast majority of home owners in Canada regardless of their age have not experienced any worsening in affordability despite the rapid increase in prices," said Benjamin Tal, senior economist at CIBC, in his latest Consumer Watch report. "The only sub-group of households that have seen some deterioration in their affordability position is older Canadians with average income of less than $50,000. Zooming in on this group we find that on average they spend close to 60 per cent of their gross income on mortgage payments, property taxes and electricity costs. This is three times the average ratio seen among households at the same age groups but with income of over $50,000."

While these mortgage holders have seen their affordability drop over the last year, unlike the U.S., this vulnerable group of Canadian mortgage holders is on the decline, said Tal. This group accounts for only 13 per cent of all mortgages in Canada, down from 19 per cent five years ago. He said that the least vulnerable mortgage holders in Canada - those over 35 with incomes over $50,000 - now comprise some 65 per cent of mortgages in Canada, up from less than 50 per cent of the market in 2003.

Tal also said Canadian homes are overshooting their fair value. "The average price of a house has risen by almost 23 per cent since reaching its recent cyclical low in January 2009, and it is now almost seven per cent above the level seen before the recession. This pace of appreciation has been quicker than justified by housing market fundamentals such as income, rent or demographic changes."

Tal estimated that, on average, Canadian home prices are now around 14 per cent over their "fair" value. This translates into more than 1.5 million houses in Canada - about 17 per cent of all dwellings in the country. He calculates that about 760,000 of these are overvalued by more than five per cent. B.C. and Alberta house prices have overshot the most with nearly one in four homes in those provinces above their fair value.