Calgary’s housing market renaissance has not been a steady process, as the overall improving trend in resale activity was inconsistent last year, says a report released today by RBC Economics Research.
But the city remains one of the more affordable housing markets in Canada.
The latest Housing Trends and Affordability Report said recent statistics, however, show that resales in the area stabilized in the first quarter of 2013 and that month-to-month gains were registered during the February to April period.
“Calgary-area buyers continue to benefit from a strong provincial economy, accelerating population growth and attractive affordability,” said Craig Wright, senior vice-president and chief economist, RBC. “RBC (affordability) measures for Calgary compare favourably against both historical norms and the national average, keeping it one of the more affordable housing markets in Canada.”
The RBC Housing Affordability Measure, which has been compiled since 1985, is based on the costs of owning a property. 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 home ownership costs, including mortgage payments, utilities and property taxes, would take up 50 per cent of a typical household’s monthly pre-tax income.
The RBC measures for Calgary in the first quarter of 2013 were:
– Bungalows: 38.7 per cent (up 0.8 points)
– Two-storey homes: 38.8 (up 0.4)
– Condominiums: 22.9 (up 0.8)
This modest deterioration in affordability was caused by higher home prices was the result of tight market conditions, said RBC.
According to the Calgary Real Estate Board, to May 22 there have been 9,170 MLS sales in the city this year, up 3.63 per cent from the same period a year ago. The median price has increased by 5.41 per cent to $399,500 while the average sale price of all properties has gone up 6.61 per cent to $453,654.
The RBC report also said Alberta’s housing market was not hindered by modestly higher home prices in the first quarter of 2013, as high household income across the province kept market conditions among the most affordable in Canada.
“Despite higher prices and, in turn, a slight erosion in affordability in the first quarter, homebuyers in Alberta enjoyed substantial buying power thanks to their elevated income. The provincial market remains among the most affordable in Canada,” said Wright. “Barring an unexpected shock to the economy, Alberta’s housing market should remain brisk in 2013.”
RBC’s housing affordability measure for the benchmark detached bungalow in Canada’s largest cities is as follows: Vancouver 82.3 per cent (up 0.1 percentage points from the previous quarter); Toronto 53.8 per cent (up 0.8 points); Montreal 40.1 per cent (up 0.6 points); Ottawa 39.1 per cent (up 0.1 points); Calgary 38.7 per cent (up 0.8 points); Edmonton 30.4 per cent (down 0.2 points).
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