Saskatchewan's housing affordability remains in check relative to rest of Canada: RBC Economics

Saskatchewan's housing affordability remains in check relative to rest of 
Canada: RBC Economics 
TORONTO, Nov. 27, 2013 /CNW/ - Despite a slight deterioration in affordability 
across all housing types in the third quarter, Saskatchewan's housing 
affordability levels remained on relatively solid ground compared to the rest 
of Canada, according to the latest Housing Trends and Affordability Report 
issued today by RBC Economics Research. 
Housing market activity in Saskatchewan proved to be largely uneventful in the 
third quarter, as home resales were mostly flat at historically-high levels 
and as prices continued to rise at modest rates across the province. 
"With Saskatchewan's housing affordability levels largely trending sideways 
since 2009 and hovering close to historical norms, it's likely that 
affordability concerns are having little impact on homebuyers' decision 
making," said Craig Wright, senior vice-president and chief economist, RBC. 
"In the near-term, we expect the province's strong labour market and 
population growth to continue as the most powerful factors influencing 
homebuyer demand." 
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, deteriorated somewhat in the third quarter of 2013 (an 
increase in the measure represents deterioration in affordability). 
RBC's measures for the costs of owning a home in Saskatchewan at current 
market prices edged slightly higher by 0.6 percentage points to 41.3 per cent 
for two-storey homes, 0.2 percentage points to 25.1 per cent for condominiums 
and 0.1 percentage points to 37.2 per cent for detached bungalows. 
RBC's housing affordability measure for the benchmark detached bungalow in 
Canada's largest cities is as follows: Vancouver 84.2 (up 2.0 percentage 
points from the previous quarter); Toronto 55.6 (up 1.3 percentage points); 
Montreal 38.3 (up 0.3 percentage points); Ottawa 37.3 (up 0.4 percentage 
points); Calgary 33.7 (up 0.7 percentage points); Edmonton 32.9 (up 0.5 
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's housing affordability ebbs
        Firmer market conditions in the third quarter propped up home
        prices in the province, contributing to erosion in housing
        affordability levels. RBC measures rose by 1.5 percentage
        points for bungalows, 1.2 percentage points for two-storey
        homes, and 0.8 percentage points for condominiums.
    --  Alberta's affordability remains attractive despite deterioration
        Alberta's housing affordability deteriorated for the third
        consecutive quarter in the third quarter, albeit modestly. This
        kept the province in an attractive position relative to other
        provinces with respect to affordable housing. RBC's measures
        rose 0.6 percentage points for bungalows, 0.2 percentage points
        for two-storey homes and 0.1 percentage points for
        condominiums.
    --  Manitoba's housing affordability mirroring the national picture
        RBC's measures for Manitoba increased by almost the same
        magnitude as Canadian measures for single family homes in the
        third quarter (0.6 percentage points for bungalows and
        two-storey homes), while the measure for condos remained
        unchanged compared to a marginal rise of 0.1 percentage points
        in Canada overall.
    --  Ontario's single-family homes are tougher to afford relative to condos
        Ontario saw a further modest erosion in housing affordability
        in the third quarter, largely concentrated in the single-family
        home segment. RBC's measures rose by 0.9 percentage points for
        bungalows, 0.7 percentage points for two-storey homes and 0.2
        percentage points for condominiums.
    --  Quebec's affordability reverses earlier improvements
        Small improvements in Quebec's affordability levels that took
        place in the second quarter were for the most part reversed in
        the third quarter. RBC measures rose for two of three housing
        types tracked; up 0.6 percentage points for two-storey homes
        and 0.5 percentage points for bungalows. The measure for
        condominiums remained unchanged.
    --  Atlantic Canada's affordability levels remain within manageable range
        Affordability in the region compares well against the rest of
        the country, showing little movement in the third quarter, and
        keeping within a very manageable range for homebuyers. RBC's
        measures edged higher by 0.5 percentage points for two-storey
        homes and by 0.2 percentage points for bungalows. The measure
        remained unchanged for condominiums in the region.

The full RBC Housing Trends and Affordability report is available online, as 
of 8 a.m. ET today, at 
www.rbc.com/economics/economic-reports/canadian-housing-forecast.html.



SOURCE  RBC 
 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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CO: RBC
ST: Ontario
NI: FIN ECO  
-0- Nov/27/2013 10:00 GMT
 
 
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