Atlantic Canada's housing affordability remains in neutral: RBC Economics
TORONTO, Aug. 27, 2013 /CNW/ - Housing affordability in Atlantic Canada
remained at neutral levels in the second quarter of 2013, according to the
latest Housing Trends and Affordability Report issued today by RBC Economics
"Second quarter affordability levels stood close to their historical norms in
Atlantic Canada and would have had little impact on homebuyers in the region,"
said Craig Wright, senior vice-president and chief economist, RBC.
"Nevertheless, housing activity cooled in spring and early summer - likely
weighed down by a stagnant labour market and fragile consumer confidence in
many parts of the region."
RBC notes that home resales in the region rose by just 1.1 per cent from a
two-year low in the first quarter with activity relatively weak in Halifax and
Fredericton. Saint John, on the other hand, showed signs of renewed vigour.
RBC's housing affordability measures, which capture the region's proportion of
pre-tax household income needed to service the costs of owning a home at
market values, moved very slightly in all categories tracked by RBC in the
second quarter of 2013 (an increase in the measure represents deterioration in
affordability). Bungalows edged lower by 0.1 percentage points to 31.6 per
cent and condominiums fell slightly by 0.2 percentage points to 26.1 per cent.
Two-storey homes inched higher by 0.1 percentage points to 36.3 per cent.
RBC's housing affordability measure for the benchmark detached bungalow in
Canada's largest cities is as follows: Vancouver 82.1 per cent (up 2.2
percentage points from the previous quarter); Toronto 54.5 per cent (up 0.5
percentage points); Montreal 38.1 (down 0.7 percentage points); Ottawa 37.1
(up 0.5 percentage points); Edmonton 34.0 (up 1.8 percentage points); Calgary
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 takes one step back
Homeownership of single-family homes in the province became less affordable in
the second quarter of 2013 amid a surge in resale activity since early spring
following a near two-year long cooling stretch. RBC measures rose by 1.1
percentage points for bungalows, by 0.8 percentage points for two-storey
homes, and by only 0.1 percentage points for condominiums.
homeownership remains relatively affordable
Owning a home in Alberta continued to be relatively affordable for provincial
homebuyers despite some increases in ownership costs in the past two quarters.
RBC's affordability measures for the province rose between 0.1 and 0.7
percentage points across all housing types in the second quarter; yet, levels
still stood below their long-term averages.
seesaw affordability pattern endures
Affordability in the province continued to experience a seesaw-like pattern
which has characterized this market in recent years. RBC measures rose
modestly by 0.9 percentage points for bungalow and 0.5 percentage points for
two-storey homes in the latest period, while the measure for condominiums
inched lower by 0.3 percentage points.
housing affordability a mixed bag
The province's second quarter housing affordability developments proved to be
a mixed bag with RBC's measure for the two-storey home category rising by 1.8
percentage points, the measure for bungalows down slightly by 0.2 percentage
points, and the measure for condominiums edging up by 0.2 percentage points.
steady as she goes
There was little change in housing affordability in Ontario in the second
quarter. RBC's measures for both bungalows and two-storey homes rose by 0.2
percentage points relative to the first quarter, while the measure for
condominiums remained flat.
bucking the deteriorating affordability trend
The Quebec housing market bucked the national trend by enjoying a broad-based
improvement in affordability in the second quarter. RBC affordability measure
for the province fell by 0.5 percentage points for bungalows and 0.4
percentage points for condominiums; the measure for two-storey homes remained
The full RBC Housing Trends and Affordability report is available online, as
of 8 a.m. ET today, at rbc.com/economics/market/.
Craig Wright, Senior Vice-President and Chief Economist, RBC, 416 974-7457
Robert Hogue, Senior Economist, RBC, 416 974-6192 Elyse Lalonde, Manager,
Communications, RBC Capital Markets, 416 842-5635
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