TORONTO, Sept. 9 /CNW/ - Housing affordability continues to improve in
Atlantic Canada, although at a more moderate pace than the rest of the
country, according to the latest housing report released today by RBC
"The rebound in Atlantic Canada has been a more subdued affair than in
most other parts of the country, but the downturn was also more restrained
here," noted Robert Hogue, senior economist, RBC. "Overall, the East Coast
enjoys relatively attractive affordability levels, which should support
housing activity in the period ahead."
RBC's Affordability measures in the Atlantic Provinces have improved
noticeably since early last year, with homeownership costs falling between 0.4
and 0.8 percentage points in the second quarter. Sales of existing homes
climbed more than 18 per cent since January and there has also been a moderate
run-up in property values.
The report noted that St. John's continues to be among the most vibrant
housing markets in Canada - although the pace has cooled in the past few
months - while Halifax, Saint John and Charlottetown are displaying fairly
RBC's Affordability measure for a detached bungalow for Canada's largest
cities is as follows: Vancouver 63.4 per cent, Toronto 46.5 per cent, Ottawa
38.6 per cent, Montreal 37.3 per cent and Calgary 35.7 per cent.
The report also looked at mortgage carrying costs relative to incomes for
a broader sampling of cities across the country, including St. John's,
Halifax, Saint John and Charlottetown. For these cities, RBC has used a
narrower measure of housing affordability that only takes mortgage payments
relative to income into account.
The property benchmark for the Housing Affordability measure, which RBC
has compiled since 1985, is based on the costs of owning a detached bungalow.
Alternative housing types are also presented including a standard two-storey
home, a standard townhouse and a standard condo. The higher the reading, the
more costly it is to afford a home. For example, an Affordability reading of
50 per cent means that homeownership costs, including mortgage payments,
utilities and property taxes, take up 50 per cent of a typical household's
monthly pre-tax income.
Highlights from across Canada:
- British Columbia: In the second quarter, housing affordability in
B.C. eased once again, further extending the downward trend since the
start of 2008, although homeownership costs are still significantly
above long-term levels. Sales of existing homes surged by more than
125 per cent from their cyclical trough early this year. Market
conditions have tightened and there has been some firming of prices.
- Alberta: The biggest cumulative drop in the history of RBC
Affordability measures in Alberta deepened further in the second
quarter, falling to levels not seen since before the housing boom.
Existing home sales soared by more than 60 per cent between April and
July, fully reversing last year's slide. Tightening market conditions
should set the stage for some property value appreciation in the near
- Saskatchewan: Affordability has improved considerably in Saskatchewan
since early last year, but homeownership costs remain above long-term
averages. Regardless, sales of existing homes rebounded smartly,
rising by more than 50 per cent since their lows in March. If this
trend is sustained, property prices can be expected to eventually
heat up as well.
- Manitoba: The notable easing of homeownership costs in the past year
has fully repaired affordability in Manitoba, compared to historical
averages. Resale activity ramped up during spring and summer and
property prices generally maintained their steady upward trend,
supported by relatively tight market conditions.
- Ontario: Solid improvements in affordability in Ontario have
supported a strong upturn in the market in recent months. All
Affordability measures are now below historic averages, indicating
that homeownership costs are at attractive levels in the province.
The general tone of the market is generally positive, but local
demand continues to be held back by the tough economic prospects many
communities in Ontario continue to face.
- Quebec: Housing affordability improved once again in the second
quarter in Quebec, prolonging a trend that has been ongoing during
the past year. Sales of existing homes surged by more than 40 per
cent over the cyclical low reached mid-winter. With a more upbeat
market sentiment and tightening demand-supply conditions pushing
property values upward, the Quebec housing market appears to be back
The full RBC Housing Affordability report is available online, as of 8
a.m. EDT today at www.rbc.com/economics/market/pdf/house.pdf.
For further information:
For further information: Robert Hogue, RBC Economics, (416) 974-6192;
Matthew Gierasimczuk, RBC Media Relations, (416) 974-2124