The Canadian Press - ONLINE EDITION

Housing more affordable in second quarter as low rates offset high home prices

  • Print

TORONTO - The Royal Bank (TSX:RY) says housing was more affordable across Canada in the second quarter as low mortgage rates offset solid price increases.

In its latest Housing Trends and Affordability Report, the bank says it found that owning a home was more affordable in virtually all provincial and major local markets in the quarter.

The RBC housing affordability measure captures the proportion of pre-tax household income needed to service the costs of owning a specified category of home at current market values. A fall in the measure represents an improvement in affordability.

During the second quarter, affordability measures at the national level fell by 0.9 percentage points to 48 per cent for two-storey homes, by 0.6 percentage points to 42.5 per cent for detached bungalows and by 0.4 percentage points to 27.4 per cent for condominium apartments.

In May and June, Canada's home resales picked up and contributed to a 9.4 per cent seasonally-adjusted advance in the second quarter, which was the strongest quarterly gain in nearly four years.

RBC chief economist Craig Wright says that while a rebound in activity after the harsh winter weather was anticipated, the housing market also got a big boost from the biggest drop in fixed mortgage rates in almost four years.

Sellers also came out from the sidelines with a surge in new listings by eight per cent in the second quarter, following three consecutive quarterly declines.

Greater supply of homes for sale helped to unclog markets such as Toronto, where a lack of quality listings earlier this year stifled activity.

"Stats rolling in suggest that the upward momentum in Canada's housing market is being sustained and further, that a sharp slowdown is not imminent," said Wright.

"In the coming year, however, we do expect the market will gear down its resale levels and that the rate of price increases will soften."

Vancouver remains among the most expensive cities, especially for single-family homes, while Toronto is seeing deteriorating trends in affordability with levels becoming increasingly strained, predominantly for single-family homes.

Almost all other markets across Canada stand at levels close to historical averages, which suggests negative affordability-related pressures should not impact home buyer demand at this stage.

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Rumor's 30th Anniversary with Mike Wilmot, Darryl Lenox, Dave Hemstad & Derek Edwards

View more like this

Photo Store Gallery

  • A squirrel enjoys the morning sunshine next to the duck pond in Assiniboine Park Wednesday– June 27, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)
  • PHIL.HOSSACK@FREEPRESS.MB.CA 090728 / WINNIPEG FREE PRESS White Pelicans belly up to the sushi bar Tuesday afternoon at Lockport. One of North America's largest birds is a common sight along the Red RIver and on Lake Winnipeg. Here the fight each other for fish near the base of Red RIver's control structure, giving human fisher's downstream a run for their money.

View More Gallery Photos

Poll

Would you visit Dalnavert Museum if it reopened?

View Results

Ads by Google