Two major Canadian banks predict housing affordability to decline next year.

New buyers can expect home ownership to become even less affordable next year, while current owners will be largely insulated from higher rates.

Scotiabank forecasts mortgage carrying costs to increase by about 8% next year which is almost 3 times more than what the bank expects household incomes to rise by: 2.5 %

More expensive mortgages coupled with less income to pay for them is a bad combination for new buyers, which is why the bank sees affordability getting further out of reach next year.

Royal Bank recently forecast in its own report that affordability has got worse for eight quarters in a row, and across the country is now at its lowest level since 1990.

After two hikes this summer, the bank is expecting four more rate hikes by the end of next year, which would put Canada's central bank rate at 2 %.