TORONTO, Aug. 27, 2013 /CNW/ - Affordability in Manitoba's housing market was
a mixed picture in the second quarter of 2013, according to the latest Housing
Trends and Affordability Report issued today by RBC Economics Research. RBC
notes that second-quarter housing affordability in the province was only
slightly worse off than on average since the mid-1980s.
"Manitoba's homebuyers shrugged off the slightly less affordable conditions in
the second quarter resulting in a strong pick-up in resale activity," said
Craig Wright, senior vice-president and chief economist, RBC. "In fact, home
resales rebounded by 5.6 per cent from the first quarter, and following a
particularly weak winter, the spring season was quite brisk in markets such as
Winnipeg where resales returned to above the 10-year average by June."
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, varied in the second quarter of 2013 (an increase in
the measure represents deterioration in affordability).
RBC's measure for two-storey homes increased markedly by 1.8 percentage points
to 39.9 per cent and the measure for condominiums rose slightly by 0.2
percentage points to 24.2 per cent. The measure for bungalows was down
slightly by 0.2 percentage points to 38.1 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.
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
-- Atlantic Canada:
affordability stuck in neutral
Atlantic Canada's housing affordability levels remained relatively static at
neutral levels in the second quarter of 2013. Affordability measures moved
marginally in all categories tracked by RBC: bungalows and condominiums edged
lower by 0.1 percentage points and 0.2 percentage points, respectively;
two-storey homes edged up by 0.1 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/.
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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