TORONTO, May 23, 2013 /CNW/ - Despite a modest deterioration in
affordability in the first quarter of 2013, Atlantic Canada remains one
of the more affordable housing markets in Canada, according to the
latest Housing Trends and Affordability Report issued today by RBC Economics Research.
"With the exception of Saint John and Fredericton, Atlantic Canada's
housing market continues to be generally balanced," said Craig Wright,
senior vice-president and chief economist, RBC. "More recently,
however, we're seeing the region trend toward increasingly looser
conditions, which has reduced the pricing power of sellers and slowed
housing price gains, keeping affordable housing within reach for many."
RBC's housing affordability measures for the region, which capture the
pre-tax household income needed to service the costs of owning a home
at market values, rose modestly across all housing types tracked (a
rise in the measure indicates deterioration in affordability).
Following improvements over the previous two quarters, RBC measures
increased by 0.6 percentage points to 32.6 per cent for bungalows, 0.5
percentage points to 36.9 per cent for two-storey homes and 0.4
percentage points to 26.9 per cent for condominium apartments.
Cooling housing market conditions across the country over the last year
did not sail passed Atlantic Canada - home resales in the region fell
by 13 per cent between the first and last quarters of 2012.
"Activity across the region appears to have stabilized in early 2013,
with first-quarter resales data relatively unchanged from the tail end
of last year. That said, local markets varied considerably - resales in
Fredericton bounced back, which offset the dip in Halifax," added
RBC's housing affordability measure for the benchmark detached bungalow
in Canada's largest cities is as follows: Vancouver 82.3 per cent (up
0.1 percentage points from the previous quarter); Toronto 53.8 per cent
(up 0.8 percentage points); Montreal 40.1 per cent (up 0.6 percentage
points); Ottawa 39.1 per cent (up 0.1 percentage points); Calgary 38.7
per cent (up 0.8 percentage points); Edmonton 30.4 per cent (down 0.2
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.
Highlights from across Canada:
British Columbia: affordability improves, but still has a long way to go
Homeownership in the province became slightly more affordable in the
first quarter, though the market has a long way to go before homebuyers
can experience more normal levels by historical standards. RBC measures
fell by 0.4 percentage points for bungalows and by 1.3 percentage
points for two-storey homes. The measure for condominiums remained
Alberta: slight erosion in affordability does little to deter homebuyers
High household incomes in the province kept homebuyers unfazed by the
slight erosion in affordability in the first quarter. Alberta's housing
market remains a bright spot in Canada despite the fact that
affordability measures rose slightly by 0.2 percentage points across
all housing types tracked by RBC.
Saskatchewan: biggest affordability improvement in Canada
Following a noticeable deterioration in the fourth quarter of 2012,
Saskatchewan's affordability levels registered the largest improvement
across Canada in kicking-off 2013. RBC measures fell by 1.7 percentage
points for two-storey homes, 1.0 percentage point for bungalows and 0.3
percentage points for condominiums.
Manitoba: second consecutive quarter of affordability deterioration
Manitoba's affordability levels deteriorated for the second straight
quarter in the first quarter of 2013, though levels are still not
considered dangerous for provincial homebuyers. The RBC measures rose
modestly across all housing categories - up 0.8 percentage points for
bungalows, 0.4 percentage points for condominiums and 0.2 percentage
points for two-storey homes.
Ontario: affordability conditions extend their recent trends
Ontario's affordability conditions in the first quarter of 2013 were by
and large an extension of recent trends - a deterioration in the single
family homes categories and a standstill for the condominium category.
RBC's measures for both bungalows and two-storey homes rose by 0.4
percentage points, while the measure for condominiums remained
Quebec: affordability variations a mixed bag
Affordability levels in Quebec remain modestly worse than they have been
historically for single family homes, which could be contributing to
homebuyers' hesitation in pulling the trigger on purchases over the
past year. In the first quarter of 2013, RBC measures were a mixed bag,
with bungalows and two-storey homes rising 0.4 percentage points and
0.1 percentage points, respectively, and condominiums declining 0.6
The full RBC Housing Trends and Affordability report is available
online, as of 8 a.m. ET today, at rbc.com/economics/market/.
For further information:
Robert Hogue, Senior Economist, RBC Economics Research, 416 974-6192
Elyse Lalonde, Manager, Corporate Communications, RBC Capital Markets, 416 842-5635