TORONTO, Feb. 25, 2014 /CNW/ - A surge in newly listed homes ultimately
helped improve Manitoba's housing affordability in the fourth quarter
of 2013, according to the latest Housing Trends and Affordability Report issued today by RBC Economics Research.
RBC notes that, while home resales rose in the province in the fourth
quarter, a surge in listings provided more choice for Manitoba
homebuyers which helped drive prices lower for single detached homes,
improving affordability in the process in these housing categories.
Condo affordability, on the other hand, bucked the trend.
"Owning a home in Manitoba remained relatively affordable in the final
months of 2013, especially when comparing against conditions in other
markets across Canada," said Craig Wright, senior vice-president and
chief economist, RBC. "Our measures for all housing types in the
province stayed reasonably on par with historical norms in the
province, suggesting that little affordability pressure is being
exerted on Manitoba's homebuyers at the present time."
The RBC housing affordability measures, which capture the proportion of
pre-tax household income needed to service the costs of owning a home
at market values, predominantly eased in Manitoba in the fourth quarter
(a decrease in the measure represents improvement in affordability).
RBC's affordability measures fell by 1.1 percentage points to 38.6 per
cent for two-storey homes and by 0.6 percentage points to 38.0 per cent
for bungalows. However, the measure for condos rose by 0.8 percentage
points to 24.9 per cent.
RBC's housing affordability measure for the benchmark detached bungalow
in Canada's largest cities in the fourth quarter of 2013 is as follows:
Vancouver 81.6 (down 2.3 percentage points from the previous quarter);
Toronto 55.6 (up 0.1 percentage points); Montreal 38.8 (unchanged);
Ottawa 36.7 (down 0.4 percentage points); Calgary 33.8 (down 0.2
percentage points); Edmonton 33.3 (up 0.1 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) 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:
Alberta's homes become even more affordable
Owning a home at market value in Alberta became slightly more affordable
for most housing categories in the final quarter of 2013 and continued
to compare favourably against historical and national averages. RBC's
measures fell by 0.5 percentage points for two-storey homes and by 0.2
percentage points for bungalows. The measure for condominiums edged
higher by 0.1 percentage points.
Saskatchewan's affordability trends sideways
Housing affordability in the province continued to play a predominantly
neutral role in home-buying decisions with levels standing close to
historical norms. RBC's affordability measures declined 1.1 percentage
points for two-storey homes and 0.2 percentage points for bungalows.
The measure for condominiums was up by 0.4 percentage points.
Ontario's affordability picture remains largely unchanged
RBC's affordability measures for Ontario eased by 0.1 percentage points
for both bungalows and two-storey homes and stayed flat for
condominiums in the fourth quarter of 2013. Owning a single-detached
home at market value in the province continues to take a larger share
of household income compared to the historical average despite marginal
improvements for the first time in a year.
Quebec's affordability conditions little changed from the third quarter
The only observable variation in affordability conditions in Quebec
during the fourth quarter was in the two-story homes category, with
RBC's measure inching higher by 0.2 percentage points. The measures for
bungalows and condominium apartments remained unchanged. All measures
continued to stand near their long-run averages.
Atlantic Canada retains decent affordability conditions
Housing affordability in the region remained at generally neutral levels
in the fourth quarter, and still compared favourably against the
majority of markets across Canada. RBC's measures fell by 0.6
percentage points for two-storey homes and by 0.1 percentage points for
bungalows. The measure for condominiums rose by 0.2 percentage points.
The full RBC Housing Trends and Affordability report is available
online, as of 8 a.m. ET today, at rbc.com/economics/economic-reports/canadian-housing-forecast.html.
For further information:
Robert Hogue, Senior Economist, RBC Economics Research, 416-974-6192
Elyse Lalonde, Communications, RBC Capital Markets, 416-842-5635