TORONTO, Aug. 31, 2015 /CNW/ - While activity levels remained low
relative to last year, Saskatchewan's home resale market showed signs
of recovery in the second quarter of 2015, according to the latest Housing Trends and Affordability Report issued today by RBC Economics Research.
"Saskatchewan's home resale activity levels showed renewed vigour this
past spring, at a time when we continued to see little affordability
strain across the province," said Craig Wright, senior vice-president
and chief economist, RBC. "Nonetheless, strengthening demand-supply
conditions produced material price gains for single-detached homes,
reversing some of the declines that took place in previous quarters in
the face of falling oil prices."
RBC notes that prices in Saskatchewan's condo segment remained under
downward pressure in Q2 2015 amid plentiful supply. Of note, Regina
continued to face an elevated inventory of unabsorbed, newly-built
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, increased in Q2 2015 for two of the
three housing categories tracked (an increase in the measure represents
deterioration in affordability). RBC's measures for Saskatchewan rose
by 0.8 percentage points for both bungalows and two-storey homes, to
34.7 per cent and 38.8 per cent respectively, while the measure for
condos eased by 0.2 percentage points to 24.5 per cent. All measures
continue to be quite close to their long-run average and suggest little
in the way of undue affordability stress.
During Q2 2015, national affordability measures rose by 0.7 percentage
points to 43.3 per cent for bungalows and by 0.4 percentage points to
48.3 per cent for two-storey homes. The measure for condominiums
remained unchanged at 27.1 per cent.
RBC's Housing Affordability measure for the benchmark detached bungalow
in Canada's largest cities in Q2 2015 is as follows: Vancouver 88.6 (up
3.0 percentage points from Q1 2015); Toronto 59.4 (up 2.1 percentage
points); Montreal 36.0 (down 1.2 percentage points); Ottawa 35.4
(unchanged); Calgary 32.4 (down 0.4 percentage points); Edmonton 32.5
(down 0.4 percentage points).
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
home ownership 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 that would be associated if an average household were
to buy a home at present market values and interest rates. It is not an
observation of the costs actually incurred by current owners, the vast
majority of whom have bought in the past at significantly different
values than those prevailing in the latest period.
Highlights from across Canada:
British Columbia: Vancouver skews provincial affordability
Rapid home price increases in Vancouver significantly impacted housing
affordability in British Colombia in the second quarter. RBC's measures
for the province rose more than any other province, up 2.5 percentage
points for two-storey homes, 2.1 percentage points for bungalows, and
0.4 percentage points for condominiums.
Alberta: Market settling down with support from affordable conditions
Following the plunge in oil prices in the first quarter of 2015,
Alberta's housing market settled down in the second quarter. RBC's
measures for the province fell by 0.5 percentage points for two-storey
homes, 0.1 percentage points for bungalows, and inched higher by 0.2
percentage points for condominiums.
Manitoba: Affordability was a mixed bag
Owning a bungalow or condominium became less affordable in Q2, while
owning a two-story home became more affordable. RBC's measures rose
modestly for both bungalows and condominiums at 0.7 percentage points,
while the measure for two-storey homes fell by 0.5 percentage points.
Ontario: Affordability picture continues to be split
Owning a single-detached home at market prices in the province has
become less and less affordable, while owning a condominium appears to
be within reach. RBC's measures showed further deterioration for
bungalows (rising by 1.1 percentage points) and two-storey homes (up
0.7 percentage points), while condominiums remain fairly steady (down
only 0.1 percentage points).
Quebec: Improving affordability trends persist
Housing affordability continued to improve in Quebec in Q2. RBC's
affordability measures fell in all three categories for the third
consecutive quarter and by some of the largest margins across all the
provinces. Two-storey homes fell by 1.1 percentage points, bungalows
fell by 0.9 percentage points, and condominiums decreased by 0.5
Atlantic Canada: Soft demand-supply conditions despite favourable affordability
Softness in the housing market drove homeownership costs down in Q2.
RBC's affordability measures fell across all categories (between 0.3
and 0.7 percentage points), adding to the continuous decline registered
since late 2013.
The full RBC Housing Trends and Affordability report is available
online, as of 8:00 a.m. ET today, at rbc.com/economics/market.
For further information:
Robert Hogue, Senior Economist, RBC Economics Research, 416-974-6192
Romina Mari, Communications, RBC Capital Markets, 416-974-3558