Calgary and Edmonton continue to be the most affordable housing markets for major Canadian cities.
In its first quarter report, Housing Trends and Affordability, RBC Economics’ data showed that both Alberta cities had much lower shares of income that a household would need to cover ownership costs.
For Calgary the percentage was 38.1 per cent while for Edmonton it was 31.3 per cent. The national average was 50.5 per cent.
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.
Vancouver had the highest percentage in the country at 79.0 per cent followed by Toronto at 69.0 per cent, Montreal at 43.5 per cent and Ottawa at 39.3 per cent.
“The lifting of some physical distancing restrictions in May got Calgary’s housing market going again, albeit at still-depressed levels. May’s rebound in sales reversed only one-third of the 65 per cent plunge in the previous two months (though further progress is being made in June). The starting point wasn’t exactly strong either. Calgary’s market has struggled to recover from the 2014-2016 oil price crash. Property values have trended lower practically ever since,” said the report.
“But the boost to affordability did little to spur confidence. RBC’s affordability measure improved further in the first quarter, inching 0.3 percentage points lower to 38.1 per cent. Alberta’s severe recession due to COVID-19 and another oil price collapse will make full recovery even more challenging.”
The report said Edmonton’s housing market prospects are grim too.
“Other than a partial pickup as the economy reopens it’s hard to see activity returning anywhere close to normal for some time to come. High unemployment, concerns about the provincial government’s fiscal state (the public service makes up a large share of Edmonton’s employment base), and declining property values will continue to weigh heavily on homebuyer sentiment,” it said.
“Relatively good affordability, while welcomed, won’t turn things around on its own. RBC’s affordability measure got slightly better in the first quarter, easing 0.3 percentage points to 31.3.”
