The Bank of Canada’s march northward with interest rates is hurting housing affordability, according to a new study.

The latest housing affordability report from RBC Economic Research, released Tuesday, found rising interest rates are undoing the affordability gains seen at the end of 2017.

The central bank’s aggregate affordability measure rose four percentage points on a quarterly basis to 48.4 per cent, signalling that more of homeowners’ household income would need to be devoted to the cost of ownership, the report said.

“Higher mortgage rates were the main factor returning RBC’s measure to a multi-decade high. It wasn’t the first time mortgage rates increased—they also did so in the previous two quarters,” the report’s authors Craig Wright and Robert Hogue wrote. “However, a drop in home prices (centered in the Greater Toronto Area) won the day in the fourth quarter which trimmed ownership costs modestly over that period.”

However, the dip in Toronto housing prices – which was largely responsible for the increased affordability reported by RBC in April – continued through the beginning of 2018. Toronto and Winnipeg were the only major Canadian markets to see improved affordability in 2018’s first quarter.

RBC warned the potential for the Bank of Canada to raise rates by a full percentage point by this time next year could make for an even bleaker future when it comes to Canadians’ mortgage rates. The central bank will make its next interest rate decision July 11, with the implied probability of a hike hovering around 82 per cent as of 10:11 a.m. ET Tuesday morning.

“Our view is that the Bank of Canada will proceed with a series of rate hikes that will raise its overnight rate from 1.25 per cent currently to 2.25 per cent in the first half of 2019. This would have the potential to stress housing affordability significantly.”

The report also saw no reprieve for Vancouver’s housing market, which it described as having reached “crisis levels.”

“Homeownership costs reached their highest levels on record in the first quarter of 2018 — considered by many as crisis levels,” the report’s authors wrote. “While the situation isn’t as extreme as it is in Vancouver, Victoria continued to experience marked deterioration in affordability in the first quarter.”