Market Snapshot
  • U.S.
  • Europe
  • Asia
Ticker Volume Price Price Delta
DJIA 16,262.56 89.32 0.55%
S&P 500 1,842.98 12.37 0.68%
NASDAQ 4,034.16 11.47 0.29%
Ticker Volume Price Price Delta
STOXX 50 3,091.52 -40.05 -1.28%
FTSE 100 6,541.61 -42.15 -0.64%
DAX 9,173.71 -165.46 -1.77%
Ticker Volume Price Price Delta
NIKKEI 14,354.06 357.25 2.55%
TOPIX 1,160.59 24.50 2.16%
HANG SENG 22,813.92 142.66 0.63%

Housing affordability in Atlantic Canada remains the envy of the country's home buyers: RBC Economics


Housing affordability in Atlantic Canada remains the envy of the country's home buyers: RBC Economics

TORONTO, Feb. 25, 2013 /CNW/ - Atlantic Canada's long-standing status as an affordable housing market received another boost in the fourth quarter of 2012, according to the latest Housing Trends and Affordability Report issued today by RBC Economics Research.

"Affordability levels in Atlantic Canada improved yet again in the last quarter of 2012, with measures for two-storey homes and detached bungalows dropping again and hitting levels that are at, or slightly below their long-term averages and well below the national averages," said Craig Wright, senior vice-president and chief economist, RBC. "Condos across the region became slightly more difficult to own for a typical household budget in the fourth quarter; however, this comes on the heels of a notable improvement in affordability around the mid year mark."

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, were slightly lower in two out of three housing types (a decrease in the measure represents an improvement in affordability).

The RBC measure for the benchmark detached bungalow fell by 0.5 percentage points to 31.9 per cent and the standard two-storey home by 1.0 percentage points to 36.3 per cent. The measure for condominium apartments rose by 0.3 percentage points to 26.4 per cent.

"Even with little to no affordability-related tensions across the region, there was a pull back in fourth quarter home resales, cumulating in a 13 per cent drop since the start of 2012," added Wright. "This dip in activity, coupled with a steady rise in the number of homes newly listed for sale in 2012, resulted in considerably softer market conditions in Atlantic Canada."

Fourth quarter home resales fell in the majority of local markets, including: Halifax, Moncton, Fredericton and Saint John. Markets such as Fredericton and Saint John in particular now favour buyers.

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 points.
    --  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.
    --  Manitoba:
        market vigour unhindered by slight affordability deterioration
        Manitoba's housing market registered a banner year in 2012 with
        a record 14,000 existing homes sold, indicating that housing
        affordability levels had little dissuasive effect on homebuyers
        in 2012. Although measures for detached bungalows and
        condominiums deteriorated in the fourth quarter, measures for
        two-storey homes remained unchanged. RBC's measures for
        Manitoba continued to rank slightly above their long-term
        average, suggesting that any affordability strain is likely
        minimal at this point.
    --  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).

The full RBC Housing Trends and Affordability report is available online, as 
of 8 a.m. ET today, at rbc.com/economics/market/.

 Robert Hogue, Senior Economist, RBC Economics Research, 416 974-6192 Elyse 
Lalonde, Manager, Communications, RBC Capital Markets, 416 842-5635

SOURCE: RBC

To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/February2013/25/c7860.html

CO: RBC
ST: Ontario
NI: FIN ECO ECOSURV 

-0- Feb/25/2013 10:00 GMT

Sponsored Links
Advertisement
Advertisements
Sponsored Links
Advertisement