TORONTO, Feb. 25, 2013 /CNW/ - Quebec's housing affordability registered
a general improvement for the third consecutive quarter in the final
quarter of 2012, according to the latest Housing Trends and Affordability Report, released today by RBC Economics Research. RBC notes, however, that
such progress did little to stimulate homebuyer demand in the fourth
"While Quebec experienced strong housing demand early last year, resale
activity began to cool in the spring - a trend that continued through
to the end of the year," said Craig Wright, senior vice-president and
chief economist, RBC. "Even still, overall market conditions only
slightly softened, which helped to temper the rate of rising home
prices rather than cause widespread declines."
With the exception of two-storey homes, the most recent affordability
levels match long-term averages in the province and suggest little in
the way of undue affordability-related strain on Quebec homebuyers.
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 in the province, fell in two of the
three housing categories; two-storey homes edged lower by 1.1
percentage points to 41 per cent and detached bungalows by 0.3
percentage points to 32.8 per cent. The measure for condominium
apartments rose by 0.4 percentage points to 27.4 per cent.
Montreal-area affordability follows provincial trend and improves for
third consecutive quarter
Although the costs of owning a home still took a bigger bite out of
household budgets in Montreal than it has on average historically,
homeownership became more affordable for the third quarter in a row.
In the fourth quarter, RBC measures for Montreal declined in both two
storey homes and detached bungalows by 1.4 percentage points (to 50.4
per cent) and 0.9 percentage points (to 39.3 per cent), respectively.
Condominium apartments, however, rose marginally by 0.1 percentage
points to 31.8 per cent.
"Slower momentum in home resales, which were down by more than 15 per
cent in the fourth quarter compared to the same period a year earlier,
and downward pressure on prices helped to make the Montreal-area market
modestly more affordable in the fourth quarter," explained Wright.
"While some small price declines are possible in the near term,
reasonably balanced conditions between buyers and sellers at this stage
should help to limit their extent."
RBC's housing affordability measure for the benchmark detached bungalow
in Canada's largest cities is as follows: Vancouver 82.2 per cent (down
2.6 percentage points from the previous quarter); Toronto 52.8 per cent
(down 0.4 percentage points); Montreal 39.3 per cent (down 0.9
percentage points); Ottawa 38.8 per cent (down 0.5 percentage points);
Calgary 38.1 per cent (up 0.2 percentage points) and Edmonton 30.7 per
cent (down 0.1 percentage points).
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:
British Columbia: housing affordability improving, still has to go the distance
While housing affordability in British Columbia still has a long way to
go before reaching less stressful levels, homebuyers in the province
received a welcome reprieve in the fourth quarter. RBC measures fell by
1.1 percentage points for condominium apartments and 1.0 percentage
point for detached bungalows. The two-storey home category experienced
a small increase (0.4 percentage points), though this followed a
substantial decline in the third quarter.
Alberta: vibrant market bolstered by attractive affordability
Brisk demand for the province's housing in 2012 was supported by a
strong provincial economy, accelerating population growth and
attractive affordability. Further improvement was registered in the
fourth quarter with measures falling between 0.1 and 0.2 percentage
Saskatchewan: affordability conditions buck the national trend
Tight market conditions at the beginning of 2012 had a lasting impact on
home prices in Saskatchewan, which climbed at some of the faster paces
in Canada in the fourth quarter. Rising property values caused
affordability to deteriorate in the fourth quarter with measures
increasing between 0.5 and 1.1 percentage points.
Manitoba: market vigour unhindered by slight affordability deterioration
Manitoba's housing market registered a banner year in 2012 with a record
14,000 existing homes sold, indicating that housing affordability
levels had little dissuasive effect on homebuyers in 2012. Although
measures for detached bungalows and condominiums deteriorated in the
fourth quarter, measures for two-storey homes remained unchanged. RBC's
measures for Manitoba continued to rank slightly above their long-term
average, suggesting that any affordability strain is likely minimal at
Ontario: affordability largely improves, tempering overall market conditionsThe
tightness that characterized Ontario's housing market in the early part
of 2012 gave way and a more balanced market was observed in the second
half of 2012, improving overall affordability conditions in the
province. RBC's measures inched lower by 0.1 and 0.3 percentage points
for the detached bungalow and condominium apartment, respectively,
while the measure for two-storey homes rose marginally by 0.1
Atlantic Canada: housing continues to be affordable
Affordability in the Atlantic region received another boost in the
fourth quarter, with RBC measures falling for two-storey homes (by 1.0
percentage points) and detached bungalows (by 0.5 percentage points),
keeping levels well below their respective national averages. The
measure for condominium apartments rose modestly by 0.3 percentage
points, though this followed a more sizable drop in the previous
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 Economics Research, 416 974-6192
Elyse Lalonde, Manager, Communications, RBC Capital Markets, 416 842-5635