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
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
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
-- 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
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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