East coast housing market remains balanced, except for a buyers' market in Saint John
TORONTO, Nov. 25, 2011 /CNW/ - Homeownership remains affordable in the
Atlantic provinces and became even more so in the third quarter,
according to the latest Housing Trends and Affordability Report released today by RBC Economics.
"Faithful to its reputation, Atlantic Canada's housing market continues
to show everything in moderation," said Robert Hogue, senior economist,
RBC. "When considering the prospects of owning a home, households in
the region continued to face some of the lowest homeownership costs in
Canada. In short, housing on the east coast is affordable."
In the third quarter, home resales and prices increased marginally.
RBC's housing affordability measures for Atlantic Canada, which capture
the region's proportion of pre-tax household income needed to service
the costs of owning a home at market values, have shown slight
decreases across all housing types (a decrease represents an
improvement in affordability). The measure for the standard two-storey
home decreased by 0.6 percentage points to 37.9 per cent and the
measures for detached bungalows and condominiums decreased by 0.5 and
0.4 percentage points, respectively, to 32.9 and 27 per cent.
"Some deterioration in New Brunswick's labour market has had a cooling
effect on home resale activity in the region, but the overall picture
in Atlantic Canada remains balanced," added Hogue. "As we move into
next year, the region's economic growth is projected to slow and will
likely translate into further moderate housing trends."
RBC's housing affordability measure for the benchmark detached bungalow
in Canada's largest cities is as follows: Vancouver 90.6 per cent (down
1.5 percentage points from the previous quarter), Toronto 52.1 per cent
(up 0.1 percentage points), Montreal 40.9 per cent (down 1.3 percentage
points), Ottawa 40.8 per cent (down 0.6 percentage points), Calgary
37.6 per cent (up 0.5 percentage points) and Edmonton 33.2 per cent
(down 0.6 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. Alternative
housing types are also presented, including a standard two-storey home
and a standard condominium. The higher the reading, the more costly it
is to afford a home based on going market values. For example, an
affordability reading of 50 per cent means that homeownership costs,
including mortgage payments, utilities and property taxes, take up 50
per cent of a typical household's monthly pre-tax income.
Highlights from across Canada:
British Columbia: The combination of moderate declines in mortgage rates and softer prices
for some housing types made it slightly more affordable to own a home
in British Columbia in the third quarter. The RBC Affordability
measures for British Columbia decreased between 0.3 and 1.2 percentage
points in the quarter, but remain well above historical norms. The poor
affordability picture in British Columbia will continue to weigh on
local housing demand.
Vancouver continues to experience sky-high home prices, even though the
RBC affordability measures fell between 1.5 percentage points and 0.8
percentage points. Current market prices continue to weigh on local
homebuyers, as home ownership costs remain well above historical norms.
Alberta: Impressive gains in Alberta's economy contributed to a stronger
provincial housing market in the third quarter of this year. Home
resales and housing starts reached their highest levels in over a year,
thanks to renewed demand for housing in the province. RBC affordability
measures for Alberta remained mostly unchanged and the lowest among the
provinces in the third quarter.
Affordability measures in Calgary deteriorated slightly for most housing
types in the third quarter, rising between 0.2 and 0.5 percentage
points. Nonetheless, Calgary-area homebuyers continue to benefit from
attractive affordability, which remained the best among Canada's major
Saskatchewan: In the third quarter, there was widespread improvement in housing
affordability in Saskatchewan. RBC measures fell for all housing types
between 0.8 and 0.9 percentage points, reversing part of the increases
from the previous quarter. Home resales picked up significantly in the
province, with strong gains registered in Saskatoon and Regina. The
Saskatchewan housing market will continue to be well-supported by
strong economic growth in the coming year.
Manitoba: Housing affordability continues to be attractive in Manitoba, showing
some of the most significant improvements in the country in the third
quarter. The RBC measures for two-storey homes fell 1.5 percentage
points, while the measures for detached bungalows declined by 1.2 per
cent and for condominium apartments by 0.8 percentage points.
Homebuyers took advantage of the greater affordability in the third
quarter and boosted home resales by 5.3 per cent.
Ontario: Ontario's housing affordability experienced very little change in the
third quarter of 2011. Condominium apartments were the only housing
type to see any movement, with the RBC measure decreasing by a mere 0.1
percentage point. Affordability in Ontario stands just slightly worse
than the historical average in the province. Home resales in Ontario
increased at a robust 3.8 per cent rate. Market activity in Ontario is
balanced at the moment, and home prices are increasing at a steady yet
moderate pace. The number of homes for sale in Ontario is on the rise,
which will likely slow the pace of property appreciation in the period
The Toronto area remains a sellers market even as RBC measures clearly
stand above long-term averages for the area. In the third quarter,
measures for Toronto were little changed, increasing by a mere 0.1
percentage point for detached bungalows, declining by 0.3 percentage
points for two-storey homes and staying flat for condominiums.
Ottawa measures decreased over all housing types in the third quarter
from 0.2 to 0.6 percentage points. The earlier cooling in market
activity in the area has almost entirely reversed in the latest period,
as home resales rebounded by eight per cent.
Quebec: RBC measures for Quebec declined between 0.1 and 1.4 percentage points,
reversing some of the back-to-back deteriorations in affordability seen
in the first and second quarters. All measures in Quebec stand slightly
above their long-term averages, and more so in the case of standard
two-storey homes, corresponding to a moderate strain in affordability
in the province.
Montreal's affordability measure for standard two-storey homes fell the
most among Canada's largest cities in the third quarter, dropping by
2.3 percentage points. The measure for detached bungalows also fell
substantially (by 1.3 percentage points), while condominium
affordability was largely unchanged (a marginal increase of 0.1
percentage points). Despite the improvement in the latest period, the
Montreal-area market still faces some stress, as affordability levels
continue to be somewhat worse than they have historically been, on
The full RBC Housing Trends and Affordability report is available
online, as of 8 a.m. ET today, at www.rbc.com/economics/market/.
For further information:
Robert Hogue, RBC Economics Research, 416-974-6192
Elyse Lalonde, Media Relations, RBC, 416-974-8810