TORONTO, March 3, 2015 /CNW/ - Atlantic Canada's improving housing
affordability trend continued in the fourth quarter of 2014, according
to the latest Housing Trends and Affordability Report issued today by RBC Economics.
The report notes that housing has become more and more affordable since
the end of 2013, coinciding with a period of soft market activity and
historically elevated inventory levels that significantly contained
"Atlantic Canada has long had some of the best housing affordability
levels in the country and the fourth quarter of 2014 was no exception,"
said Craig Wright, senior vice-president and chief economist, RBC.
"We've seen weakening prices in the past year in Fredericton, Saint
John, PEI, Newfoundland, and until not that long ago, Moncton, because
market conditions were favourable to buyers. However, there were signs
that activity picked up in Moncton and Saint John in the second half of
The RBC housing affordability measures, which capture the region's
proportion of pre-tax household income that would be needed to service
the costs of owning a home at current market values, fell for most
housing types in the fourth quarter of 2014 (a decline in the measure
represents an improvement in affordability).
RBC's measures for two-storey homes and bungalows eased by 0.5 and 0.1
percentage points, to 34.6 per cent and 30.1 per cent, respectively.
The measure for condos edged up marginally by 0.1 percentage points to
25.1 per cent.
RBC's housing affordability measure for the benchmark detached bungalow
in Canada's largest cities in Q4 of 2014 is as follows: Vancouver 82.4
(down 1.2 percentage points from Q3); Toronto 56.8 (up 0.8 percentage
points); Montreal 37.3 (unchanged); Ottawa 36.0 (up 0.2 percentage
points); Calgary 33.7 (down 0.6 percentage points); Edmonton 33.5 (up
0.1 percentage points).
The RBC Housing Affordability measure, which has been compiled since
1985, is based on the calculated 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.
It is important to note that RBC's measure is designed to gauge
ownership costs associated with buying a home at present market values.
It is not a representation of the actual costs incurred by current
owners, the vast majority of whom have bought in the past at
significantly different values than those prevailing in the latest
Highlights from across Canada:
British Columbia: Small improvement in affordability conditions
Housing affordability slightly improved across all categories of homes
measured by RBC, primarily reflecting stronger household income arising
from brighter economic prospects in the province. During Q4, RBC's
measures eased between 0.1 and 0.7 percentage points.
Alberta: Housing remains relatively affordable despite buffeted economic
Housing affordability was mainly unchanged in Alberta during Q4,
continuing to be fairly attractive relative to other provinces and
compared to historical averages. RBC's measure for bungalows fell by
0.4 percentage points, and remained unchanged for both condos and
Saskatchewan: Price declines translate to improved affordability
Price declines in the province during the fourth quarter of 2014
contributed to the fifth consecutive quarter of affordability
improvements. RBC's measures fell by 0.6 percentage points for both
bungalows and two-storey homes. The measure for condos, however, rose
by 0.6 percentage points.
Manitoba: Affordability improves across the provincial housing market
It became more affordable to buy a home in Manitoba during the fourth
quarter of 2014 with RBC's measures falling across all housing
categories (between 0.1 and 0.4 percentage points over the third
Ontario: Robust housing market conditions impact affordability
Ontario's housing market bucked the generally improving trend in
affordability across Canada in Q4, 2014. RBC's measures rose in all
categories between 0.2 percentage points and 1.0 percentage points.
Quebec: Broad-based improvements in affordability continue
Steady improvements in Quebec's housing affordability continued in the
fourth quarter of 2014 with RBC's measure declining across all
categories tracked. Measures fell by 0.6 percentage points for
two-storey homes and by 0.4 percentage points for both bungalows and
The full RBC Housing Trends and Affordability report is available online as of 8 a.m. ET today.
For further information:
Robert Hogue, Senior Economist, RBC Economics Research, 416-974-6192
Elyse Lalonde, Communications, RBC Capital Markets, 416-842-5635