TORONTO, May 27, 2014 /CNW/ - Saskatchewan's housing affordability
slightly improved in the first quarter of 2014, according to the latest
Housing Trends and Affordability Report issued today by RBC Economics Research. RBC says that in spite of this
improved affordability picture, first quarter home resales declined for
the second straight quarter by 5.5 per cent.
"Poor weather should shoulder much of the blame for a softening in
activity this winter," said Craig Wright, senior vice-president and
chief economist, RBC. "As we move forward into the spring we should see
a pick-up. In fact, a snapback in April data - resales jumped 7.0 per
cent from March - suggests that the slowdown is likely temporary."
The RBC housing affordability measures, which capture the province's
proportion of pre-tax household income that would be needed to service
the costs of owning a home at current 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 measures decreased by 0.6 percentage points for bungalows to 36.4
per cent, and 0.1 percentage points for condominiums to 25.4 per cent.
The measure for two-storey homes rose 0.5 percentage points to 40.7 per
The latest data upholds the trend in Saskatchewan's housing
affordability since 2009, that levels remain relatively flat and near
historical norms. This suggests that affordability plays a largely
neutral role in the home-buying decisions in the province.
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.
Manitoba: housing becomes more affordable
Manitoba homebuyers benefited from some improvement in affordability in
the first quarter of 2014. RBC measures for both bungalows and
condominiums fell in the first quarter to their lowest levels in nearly
a year - by 0.4 percentage points and 0.6 percentage points,
respectively. Although the measure for two-storey homes rose by 0.3
percentage points, it stands at a lower level than last spring.
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