Calgary and Edmonton continue to be shining lights in comparison to other Canadian cities when it comes to affordability in owning a home.
That was evident again on Thursday as RBC Economics released its latest Housing Trends and Affordability Report.
When it comes to the share of income a household would need to cover home ownership costs, Calgary and Edmonton were the lowest of all the major centres surveyed.
Here are the percentages: Canada, 51.4; Vancouver, 82.0; Toronto, 66.0; Montreal, 44.3; Ottawa, 41.1; Calgary, 39.7; and Edmonton, 34.3.
The report said there is light at the end of the tunnel for the Calgary market.
“A couple of months don’t make a trend but a pickup in resale activity in April and May augurs well for a recovery to take hold in Calgary’s market. We expect a strengthening provincial economy – following a rough start to 2019 – will boost homebuyer demand over the remainder of this year. Affordability considerations are unlikely to stand in the way of any market recovery. That’s because ownership costs are largely in line with historical norms. RBC’s aggregate measure stood at 39.7 per cent in the first quarter (down 0.4 percentage points), just marginally below the long-run average of 40.6 per cent for the area.”
For Edmonton, the report said recent positive developments will bolster confidence in the housing market.
“We see similar ‘green shoots’ popping up in the Edmonton market. Activity bounced back this spring from an eight-year low. And property values declined at slightly slower rates. If sustained, these developments should progressively bolster confidence in the market. A lack of confidence has been a bigger issue than affordability. As in Calgary, affordability is essentially at a neutral point in Edmonton with RBC’s aggregate measure (34.3 per cent in the first quarter) very close to matching its long-term average (34.1 per cent). The measure edged lower by 0.3 percentage points in the first quarter, marking the first decline in almost three years.”
The RBC Housing Affordability Measures show the proportion of median pre-tax household income that would be required to service the cost of mortgage payments (principal and interest), property taxes, and utilities based on the average market price for single-family detached homes and condo apartments, as well as for an overall aggregate of all housing types in a given market.
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