TORONTO, Feb. 25, 2013 /CNW/ - Manitoba's housing market had a banner
year in 2012 with a record 14,000 existing homes sold, despite a slight
deterioration in affordability that occurred late in the year,
according to the latest Housing Trends and Affordability Report released today by RBC Economics Research.
"Comparatively speaking, the cooling in housing activity that took place
across the country in the latter half of last year was fairly modest in
Manitoba - quite vigorous housing activity persisted," said Craig
Wright, senior vice-president and chief economist, RBC. "Our
affordability measures for Manitoba continue to stand just slightly
above historical averages, suggesting that any affordability related
strain is likely minimal at this point."
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, deteriorated somewhat in the fourth
quarter of 2012 (an increase in the measure represents deterioration in
affordability). RBC's measure for detached bungalows rose by 0.8
percentage points to 38.1 per cent and for condominium apartments
increased by 0.3 percentage points to 24.0 per cent. The measure for
two-storey homes was unchanged at 38.5 per cent.
RBC's housing affordability measure for the benchmark detached bungalow
in Canada's largest cities is as follows: Vancouver 82.2 per cent (down
2.6 percentage points from the previous quarter); Toronto 52.8 per cent
(down 0.4 percentage points); Montreal 39.3 per cent (down 0.9
percentage points); Ottawa 38.8 per cent (down 0.5 percentage points);
Calgary 38.1 per cent (up 0.2 percentage points) and Edmonton 30.7 per
cent (down 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.
Highlights from across Canada:
British Columbia: housing affordability improving, still has to go the distance--
While housing affordability in British Columbia still has a long way to
go before reaching less stressful levels, homebuyers in the province
received a welcome reprieve in the fourth quarter. RBC measures fell by
1.1 percentage points for condominium apartments and 1.0 percentage
point for detached bungalows. The two-storey home category experienced
a small increase (0.4 percentage points), though this followed a
substantial decline in the third quarter.
Alberta: vibrant market bolstered by attractive affordability
Brisk demand for the province's housing in 2012 was supported by a
strong provincial economy, accelerating population growth and
attractive affordability. Further improvement was registered in the
fourth quarter with measures falling between 0.1 and 0.2 percentage
Saskatchewan: affordability conditions buck the national trend
Tight market conditions at the beginning of 2012 had a lasting impact on
home prices in Saskatchewan, which climbed at some of the faster paces
in Canada in the fourth quarter. Rising property values caused
affordability to deteriorate in the fourth quarter with measures
increasing between 0.5 and 1.1 percentage points.
Ontario: affordability largely improves, tempering overall market
conditions--The tightness that characterized Ontario's housing market
in the early part of 2012 gave way and a more balanced market was
observed in the second half of 2012, improving overall affordability
conditions in the province. RBC's measures inched lower by 0.1 and 0.3
percentage points for the detached bungalow and condominium apartment,
respectively, while the measure for two-storey homes rose marginally by
0.1 percentage points.
Quebec: generally improving affordability tone is sustained
Quebec's housing affordability improved, for the most part, for the
third quarter in a row in the fourth quarter, yet this did little to
stimulate homebuyer demand as resale activity continued to cool in the
province. RBC measures fell for two-storey homes (by 1.1 percentage
points) and detached bungalows (by 0.3 percentage points), but rose for
condominium apartments (by 0.4 percentage points).
Atlantic Canada: housing continues to be affordable
Affordability in the Atlantic region received another boost in the
fourth quarter, with RBC measures falling for two-storey homes (by 1.0
percentage points) and detached bungalows (by 0.5 percentage points),
keeping levels well below their respective national averages. The
measure for condominium apartments rose modestly by 0.3 percentage
points, though this followed a more sizable drop in the previous
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, Communications, RBC Capital Markets, 416 842-5635