Alberta's housing market continues as one of Canada's most affordable: RBC
TORONTO, Aug. 27, 2013 /CNW/ - Alberta homebuyers continued to enjoy a
relatively affordable housing market in the second quarter, despite some
increases in ownership costs in late 2012 and early 2013, according to the
latest Housing Trends and Affordability Report issued today by RBC Economics
"Despite the fact that the market has kicked into higher gear since spring -
thereby boosting prices and increasing ownership costs - Alberta continues to
be a relatively affordable market," said Craig Wright, senior vice-president
and chief economist, RBC. "We will likely see some disruptions in market
activity trickle through in summer data from the floods in southern Alberta;
however, we anticipate the strong provincial economy will endure, supporting
further housing growth in 2014."
In the second quarter of 2013, RBC's 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, edged higher for all
three categories tracked (an increase in the measure represents deterioration
RBC's affordability measure rose by 0.7 percentage points to 32.4 per cent for
bungalows and 0.4 percentage points to 34.5 per cent for two-storey homes. The
measure for condominiums rose slightly by 0.1 percentage points to 19.6 per
cent. All measures stood at a level below their long-term average, indicating
that homeownership in the province remained historically attractive.
Calgary's housing market moving forward despite flood adversity
The flooding that hit Calgary at the end of June did not appear to have slowed
Calgary's housing market progression in the second quarter of 2013, says RBC.
On a quarterly basis, home resales in the area posted a 12 per cent gain -
their second-strongest improvement in four years.
"Though prices are now on a steeper upward trajectory, the effects have yet to
undermine affordability in a material way. In fact, affordability levels in
Calgary continue to be among the best in Canada," said Wright. "Demand for
Calgary housing will continue to benefit from a strong provincial economy,
solid labour market, fast-rising population and attractive affordability."
RBC measures for Calgary showed little movement across all housing categories
in the second quarter of 2013. RBC's measure for two-storey homes rose by 0.5
percentage points to 33.6 per cent and for condominium apartments edged lower
by 0.2 percentage points to 19.4 per cent; the measure for bungalows remained
unchanged at 33.0 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.
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
-- 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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