A new report by RBC Economics shows that Calgary and Edmonton are the most affordable housing markets of major centres in the country.
The bank’s Housing Trends and Affordability report indicates that the two Alberta cities have the lowest percentage share of income a household would need to cover homeownership costs.
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.
Edmonton’s was at 33.6 per cent while Calgary was at 38.9 per cent.
The national average was 51.3 per cent.
The levels of other major Canadian centres were: Vancouver, 79.5 per cent; Toronto, 66.3 per cent; Ottawa, 41.7 per cent; and Montreal, 44.5 per cent.
For Calgary, the report said affordability won’t stand in the way of the housing market’s recovery.
“Owning a home got a little more affordable in Calgary this year. Not that affordability was major issue to begin with. RBC’s aggregate measure has been near or below its long-term average over most of the past decade. RBC’s measure fell back-to-back in the first and second quarters to 38.9 per cent. Soft demand-supply conditions amid turbulence in Alberta’s energy sector have kept property values on a slight downward track. Early signs of a market turnaround have appeared this summer and bode well for prices to stabilize later this year,” said the report.
“Similar market dynamics have been at play in Edmonton and produced comparable affordability results. RBC’s aggregate measure eased for the second straight quarter by 0.7 percentage points to 33.6 per cent — just a tad under the 34.1 per cent long-term average. As in Calgary, economic conditions likely matter more than affordability issues for buyers. ‘Green shoots’ also emerged in Edmonton this summer. Home resales rose 8.6 per cent in the second quarter and are poised to rise further in the third quarter. We expect home prices to stabilize as market slack is used up.”
Mario Toneguzzi is a Troy Media business reporter based in Calgary.