- RBC's housing affordability measure improves for the
second-straight quarter in Q1 2019
- The improvement was widespread across the country as prices
declined in the West and parts of Atlantic Canada
- Severe affordability issues remain an "impossible obstacle"
for most living in Toronto,
Vancouver and Victoria
TORONTO, June 27, 2019 /CNW/ - Housing affordability has
improved for the second straight-quarter in Canada in the first quarter of 2019, according
to the latest RBC Economics Housing Trends and Affordability
Report. Modest price drops in both Atlantic and Western Canada and rising household income
contributed to improved affordability.
At its core, much of the improved affordability can be traced to
"policy-engineered market downturns" that have helped lower
property values in a number of Canadian markets. Though neither
Toronto or Vancouver are near the levels that ordinary
Canadian households can afford, policy makers should be encouraged
at the overall progress toward repairing home affordability across
the country, according to Robert
Hogue, Senior Economist, RBC.
"There's a high proportion of ownership-capable families in
Canada's most affordable
markets—Saint John, St. John's,
Regina, Quebec City and
Halifax," said Hogue.
"However, only one in eight families earns the income necessary
to manage ownership costs in the Vancouver area, and one in five families in
both the Toronto area and
Victoria."
Buying a more affordable condo apartment opens the field to more
families. Yet still just one-quarter of them would be able to cover
the condo ownership costs in Vancouver, and only one-third of them in
Toronto. In most other markets,
buying a condo apartment is within the reach of close to two-thirds
of families.
RBC's national aggregate affordability measure declined by 0.3
percentage points to 51.4 per cent in the first quarter of 2019.
The measure is calculated as a share of household income. A lower
number means that buying a home is more affordable.
With interest rates no longer poised to increase and a
still-positive outlook for household income, RBC expects a further
slight improvement to Canada's
overall housing affordability picture in the near term. However,
any improvement is likely to be incremental – especially as
Toronto's housing market continues
to rebound.
Toronto home ownership
remains elusive for most buyers
Despite a small break in affordability in the past year, the bar
to home ownership remains as high as ever in Toronto. RBC's aggregate measure for the area
was 66 per cent in the first quarter—still near historically high
levels. With prices heading in a modest upward trajectory, RBC sees
little prospects for meaningful improvement in the near term.
Montreal housing isn't cheap
but activity remains on an upswing
Home resales in Montreal were
up 7 per cent from a year ago in the first five months of 2019.
While the city remains much more affordable than both Toronto and Vancouver, home ownership isn't cheap. RBC's
aggregate affordability measure, at 44.3 per cent in the first
quarter (unchanged from the fourth quarter), is near a decade-high
point and markedly above the long-run average of 38.6 per cent
Vancouver affordability
improves but still at crisis levels
After a rough couple of years, Vancouver resale activity finally ended its
steep slide this past spring. Unfortunately for prospective buyers,
housing affordability remains at crisis levels for the area. This
will continue to weigh heavily on homebuyer demand for the
foreseeable future. RBC's aggregate measure eased for a
third-straight time in the first quarter, down 1.9 percentage
points to 82.0 per cent.
About RBC
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a purpose-driven, principles-led approach to delivering leading
performance. Our success comes from the 84,000+ employees who bring
our vision, values and strategy to life so we can help our clients
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business model with a focus on innovation and providing exceptional
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more at rbc.com.
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SOURCE RBC