Manitoba housing affordability at a turning point: RBC Economics



    TORONTO, Sept. 9 /CNW/ - Moderate changes in Manitoba's housing
affordability over the second quarter suggest housing affordability is at a
turning point, according to the latest housing report released today by RBC
Economics.
    "While resale activity ramped up during the spring and summer and
property prices maintained their steady upward trend, we're anticipating that
affordability is levelling off in Manitoba," noted Robert Hogue, senior
economist, RBC.
    RBC's Housing Affordability measure for Manitoba, which captures the
proportion of pre-tax household income needed to service the costs of owning a
home, improved across three of the four classes last quarter, as the benchmark
detached bungalow moved down to 34.4 per cent, the standard townhouse down to
22.8 per cent and the standard condo down to 20.2 per cent. However, the
standard two-storey home rose to 37.2 per cent.
    The report also looked at mortgage carrying costs relative to incomes for
a broader sampling of cities across the country, including Winnipeg. For these
cities, RBC has used a narrower measure of housing affordability that only
takes mortgage payments relative to income into account.
    RBC's Affordability measure for a detached bungalow for Canada's largest
cities is as follows: Vancouver 63.4 per cent, Toronto 46.5 per cent, Ottawa
38.6 per cent, Montreal 37.3 per cent and Calgary 35.7 per cent.
    The property benchmark for the Housing Affordability measure, which RBC
has compiled since 1985, is based on the costs of owning a detached bungalow.
Alternative housing types are also presented including a standard two-storey
home, a standard townhouse and a standard condominium. The higher the reading,
the more costly it is to afford a home. 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: In the second quarter, housing affordability in
        B.C. eased once again, further extending the downward trend since the
        start of 2008, although homeownership costs are still significantly
        above long-term levels. Sales of existing homes surged by more than
        125 per cent from their cyclical trough early this year. Market
        conditions have tightened and there has been some firming of prices.

    -   Alberta: The biggest cumulative drop in the history of RBC
        Affordability measures in Alberta deepened further in the second
        quarter, falling to levels not seen since before the housing boom.
        Existing home sales soared by more than 60 per cent between April and
        July, fully reversing last year's slide. Tightening market conditions
        should set the stage for some property value appreciation in the near
        future.

    -   Saskatchewan: Affordability has improved considerably in Saskatchewan
        since early last year, but homeownership costs remain above long-term
        averages. Regardless, sales of existing homes rebounded smartly,
        rising by more than 50 per cent since their lows in March. If this
        trend is sustained, property prices can be expected to eventually
        heat up as well.

    -   Ontario: Solid improvements in affordability in Ontario have
        supported a strong upturn in the market in recent months. All
        Affordability measures are now below historic averages, indicating
        that homeownership costs are at attractive levels in the province.
        The general tone of the market is generally positive, but local
        demand continues to be held back by the tough economic prospects many
        communities in Ontario continue to face.

    -   Quebec: Housing affordability improved once again in the second
        quarter in Quebec, prolonging a trend that has been ongoing during
        the past year. Sales of existing homes surged by more than 40 per
        cent over the cyclical low reached mid-winter. With a more upbeat
        market sentiment and tightening demand-supply conditions pushing
        property values upward, the Quebec housing market appears to be back
        on track.

    -   Atlantic Canada: Rebounding from a relatively restrained downturn,
        housing affordability in Atlantic Canada continues to improve, albeit
        at a more moderate pace than elsewhere in the country. Affordability
        measures have declined noticeably since early last year and now stand
        below long-term averages. Sales of existing homes climbed by more
        than 18 per cent since January and property values increased
        modestly. Overall, Atlantic Canada is enjoying relatively attractive
        affordability levels, which should support housing activity in the
        period ahead.
    

    The full RBC Housing Affordability report is available online, as of 8
a.m. E.D.T. today at www.rbc.com/economics/market/pdf/house.pdf.





For further information:

For further information: Robert Hogue, RBC Economics Research, (416)
974-6192; Matt Gierasimczuk, Media Relations, RBC, (416) 974-2124


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