Vancouver remains the least affordable market in Canada
TORONTO, May 23, 2013 /CNW/ - While it continues to be the country's
priciest province in which to own a home at current prices, British
Columbia's housing affordability saw some improvements for the third
consecutive quarter, in the first quarter of 2013, according to the
latest Housing Trends and Affordability Report released today by RBC Economics Research.
"The cumulative affordability improvement across British Columbia in the
past year has been the biggest among the provinces, which is a good
news story," said Craig Wright, senior vice-president and chief
economist, RBC. "That said, the Vancouver-area's affordability remains
extremely poor and continues to weigh on the overall provincial housing
The RBC report notes that poor affordability levels were a key factor
that left provincial home resales at more than 30 per cent below the
10-year average for the quarter. This is the fifth-consecutive quarter
in which home resales fell in British Columbia. RBC notes that B.C. is
the only province where prices declined year-over-year in all three
housing types tracked.
RBC's housing affordability measures, which capture the province's
proportion of pre-tax household income needed to service the costs of
owning a home at market values, declined across two out of three
housing types tracked in the first quarter (a decrease in the measure
represents an improvement in affordability). The RBC measure fell for
the benchmark detached bungalow by 0.4 percentage points to 65.9 per
cent, while the two-storey home category saw a decline of 1.3
percentage points to 71.3 per cent. Standard condominiums remained
unchanged at 33.4 per cent.
After dizzying slide, Vancouver-area home resales stabilize
By the third quarter of 2012, home resales in the Vancouver-area slumped
to levels 40 per cent below their 10-year average, which raised fears
that the market could be headed for the lows seen during the 2008-09
recession. While developments at the tail end of 2012 and early 2013
may not give a definitive answer, RBC says things appear to be
"The dizzying slide in resales in Vancouver steadied in the latest two
quarters, though the price correction may not be over," said Wright.
"Buyers continue to hold the upper hand in the area and market
conditions are unlikely to tighten meaningfully in the short-term."
Though first quarter affordability measures declined slightly, Vancouver
continues to be the least affordable market in Canada. First quarter
RBC affordability measures for Vancouver increased 0.1 percentage
points to 82.3 per cent for detached bungalows, decreased 0.2
percentage points to 41.6 per cent for condominium apartments and eased
0.6 percentage points to 87.2 per cent for two-storey homes.
RBC's housing affordability measure for the benchmark detached bungalow
in Canada's largest cities is as follows: Vancouver 82.3 per cent (up
0.1 percentage points from the previous quarter); Toronto 53.8 per cent
(up 0.8 percentage points); Montreal 40.1 per cent (up 0.6 percentage
points); Ottawa 39.1 per cent (up 0.1 percentage points); Calgary 38.7
per cent (up 0.8 percentage points); Edmonton 30.4 per cent (down 0.2
The RBC Housing Affordability Measure, which has been compiled since
1985, is based on the costs of owning a detached bungalow (a reasonable
property benchmark for the housing market in Canada) at market value.
Alternative housing types are also presented, including a standard
two-storey home and a standard condominium apartment. The higher the
reading, the more difficult it is to afford a home at market values.
For example, an affordability reading of 50 per cent means that
homeownership costs, including mortgage payments, utilities and
property taxes, would take up 50 per cent of a typical household's
monthly pre-tax income.
Highlights from across Canada:
Alberta: slight erosion in affordability does little to deter homebuyers
High household incomes in the province kept homebuyers unfazed by the
slight erosion in affordability in the first quarter. Alberta's housing
market remains a bright spot in Canada despite the fact that
affordability measures rose slightly by 0.2 percentage points across
all housing types tracked by RBC.
Saskatchewan: biggest affordability improvement in Canada
Following a noticeable deterioration in the fourth quarter of 2012,
Saskatchewan's affordability levels registered the largest improvement
across Canada in kicking-off 2013. RBC measures fell by 1.7 percentage
points for two-storey homes, 1.0 percentage point for bungalows and 0.3
percentage points for condominiums.
Manitoba: second consecutive quarter of affordability deterioration
Manitoba's affordability levels deteriorated for the second straight
quarter in the first quarter of 2013, though levels are still not
considered dangerous for provincial homebuyers. The RBC measures rose
modestly across all housing categories - up 0.8 percentage points for
bungalows, 0.4 percentage points for condominiums and 0.2 percentage
points for two-storey homes.
Ontario: affordability conditions extend their recent trends
Ontario's affordability conditions in the first quarter of 2013 were by
and large an extension of recent trends - a deterioration in the single
family homes categories and a standstill for the condominium category.
RBC's measures for both bungalows and two-storey homes rose by 0.4
percentage points, while the measure for condominiums remained
Quebec: affordability variations a mixed bag
Affordability levels in Quebec remain modestly worse than they have been
historically for single family homes, which could be contributing to
homebuyers' hesitation in pulling the trigger on purchases over the
past year. In the first quarter of 2013, RBC measures were a mixed bag,
with bungalows and two-storey homes rising 0.4 percentage points and
0.1 percentage points, respectively, and condominiums declining 0.6
Atlantic Canada: cooling housing market keeps affordability attractive
Increasingly looser housing market conditions have reduced sellers'
pricing power, keeping affordability fairly attractive in Atlantic
Canada. First quarter measures rose very modestly, between 0.4 and 0.6
percentage points, for all categories tracked by RBC.
The full RBC Housing Trends and Affordability report is available
online, as of 8 a.m. ET today, at rbc.com/economics/market/.
For further information:
Robert Hogue, Senior Economist, RBC, 416 974-6192
Elyse Lalonde, Manager, Corporate Communications, RBC Capital Markets, 416 842-5635