TORONTO, Nov. 25, 2011 /CNW/ - Manitoba's housing affordability
experienced some of the most noticeable improvements in the country
during the third quarter of 2011, according to the latest Housing Trends and Affordability Report issued today by RBC Economics. Homeownership costs in the province
fell, as mortgage rates eased and home prices reversed some of the
record-breaking gains made in the second quarter.
"Manitoba's affordability levels continue to stand near their historic
norms - a telltale sign that homeownership in the province is
reasonably achievable," said Robert Hogue, senior economist, RBC.
"Homebuyers took advantage of this more affordable market in the third
quarter, pushing home resales higher by 5.3 per cent."
RBC's housing affordability measures for Manitoba, which capture the
provinces proportion of pre-tax household income needed to service the
costs of owning a home at the going market value, decreased across all
housing types in the third quarter of 2011 (a decrease represents a
gain in affordability). The measure for the benchmark detached bungalow
in the province fell to 35.6 per cent (a decrease of 1.2 percentage
points from the previous quarter), the standard condominium to 21.4
(down 0.5 percentage points) and the standard two-storey home to 37.9
per cent (a decrease of 1.5 percentage points).
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. For example, an affordability reading of 50 per
cent means that the homeownership costs, including mortage payments,
utilities and property taxes, take up 50 per cent of a typical
household's monthly pre-taxed 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.
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
Atlantic Canada: Atlantic Canada's housing market continues to be among the most
affordable in Canada, with further modest improvements in the third
quarter: the RBC measures eased between 0.4 and 0.6 percentage points.
Although many markets in New Brunswick have displayed signs of cooling
in the last two quarters amid deterioration in the province's labour
market, overall, home resales increased marginally in the region. With
slow economic growth projected in Atlantic Canada next year, housing
trends are likely to remain largely stable in the region.
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