TORONTO, May 27, 2014 /CNW/ - Manitoba's housing affordability made
modest improvements in the first quarter of 2014, according to the
latest Housing Trends and Affordability Report issued today by RBC Economics Research.
Frigid winter temperatures disturbed housing market activity in the
first quarter, with home resales plunging by 6.6 per cent from the
fourth quarter, reversing most of the gains made in the previous three
quarters. RBC says, however, that April resales were 5.0 per cent
higher than March, which indicates that the spring season is likely to
spur homebuyers back into action.
"Manitoba homebuyers will not only benefit from better weather this
spring, but also an overall improvement in affordability conditions,"
said Craig Wright, senior vice-president and chief economist, RBC.
"Measures for both bungalows and condominiums fell to their lowest
levels in almost a year, and though rising slightly this quarter, the
measure for two-storey homes is still lower than last spring."
RBC notes that strong increases in the number of homes available for
sale since last year brought more choices to buyers and likely will
subdue future price gains.
The RBC 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, decreased for two of the three
categories in the first quarter of 2014 (a decline in the measure
represents improvement in affordability).
RBC's affordability measures eased by 0.4 percentage points to 37.3 per
cent for bungalows and by 0.6 percentage points to 24.1 per cent for
condominium apartments. The measure for two-storey homes rose modestly
by 0.3 percentage points to 38.6 per cent.
RBC's housing affordability measure for the benchmark detached bungalow
in Canada's largest cities in the first quarter of 2014 is as follows:
Vancouver 82.4 (up 0.9 percentage points from the previous quarter);
Toronto 56.1 (up 0.2 percentage points); Montreal 38.9 (up 0.1
percentage points); Ottawa 36.4 (down 0.5 percentage points); Calgary
34.5 (up 0.9 percentage points); Edmonton 32.9 (down 0.2 percentage
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: single-family homes less affordable
Housing affordability continues to be poor in British Columbia. RBC
measures rose 1.2 percentage points for two-storey homes and 0.9
percentage points for bungalows to 74.2 per cent and 68.4 per cent,
respectively. The measure for condos remained unchanged at 33.6 per
Alberta: attractive housing affordability conditions
The provincial housing market continues to be among the stronger in
Canada, supported by a booming economy, rapidly rising population and
attractive affordability. RBC's measures rose a slight 0.1 percentage
points to 32.6 per cent for bungalows and 0.4 percentage points to 20.2
per cent for condominiums. The measure for two-storey homes was
unchanged at 34.4 per cent.
Saskatchewan: affordability plays a neutral role
Owning a home in Saskatchewan became slightly more affordable for the
most part in Q1 2014. RBC's measures fell in two of the three
categories - bungalows by 0.6 percentage points to 36.4 per cent and
condominiums by 0.1 percentage points to 25.4 per cent. The rise in the
measure for two-storey homes - 0.5 percentage points to 40.7 per cent -
reversed a decline that took place in the previous quarter.
Ontario: affordability deteriorates in single-family homes
First quarter affordability measures point to a consistently eroding
affordability picture in the province, particularly for single-family
homes. RBC's measures stood at 24-year highs for bungalows at 44.9 per
cent and two-storey homes at 51.0 per cent. The measure for
condominiums was 29.4 per cent - not much below its multi-decade peak.
Quebec: housing affordability levels sit close to historical averages
Housing affordability in the province did not erode much or at all in
the first quarter and largely remain close to historical norms. RBC's
measures edged higher by 0.2 percentage points for bungalows to 34.5
per cent and 0.1 percentage points for two-storey homes to 43.7 per
cent. The measure for condominiums fell 0.1 percentage points to 26.6
Atlantic: favourable affordability conditions do little to energize
The region's housing affordability conditions largely improved in the
first quarter, but did little to pull the market out of its slump. RBC
measures declined 0.4 percentage points to 31.2 per cent for bungalows
and 0.4 percentage points to 25.9 per cent for condominiums. The
measure for two-storey homes rose by 0.2 percentage points to 36.2, but
remained below its long-term average.
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