Hey there, time traveller!
This article was published 25/2/2013 (1632 days ago), so information in it may no longer be current.
OWNING a bungalow or condominium has become less affordable in recent months as Manitoba's housing market continues to rebuff many of the forces dragging down sales and prices in some other parts of the country.
In its latest quarterly housing report, RBC Economics said the percentage of household income needed to own a standard detached bungalow in Manitoba climbed by 0.8 per cent to 38.1 per cent from the third to fourth quarters of 2012. And the percentage of income needed to own a standard condo rose by 0.3 per cent to 24 per cent.
The only type of home where affordability didn't deteriorate was a standard two-storey house, where the affordability index remained unchanged at 38.5 per cent.
That was in contrast to several other regions in the country, including British Columbia, Alberta and Ontario, where housing affordability improved for most types of homes in the final quarter of 2012. And that led to a slight improvement in affordability at the national level for the second quarter in a row.
The bank said the main reason Manitoba homeowners haven't seen much of a break yet is because the demand for homes here remains strong and the supply of available houses in its largest city -- Winnipeg -- remains tight. That continues to put upward pressure on prices and on the amount of household income required to own a home.
It noted 2012 was a particularly busy year for the province's resale-homes market, with unit sales hitting a record 14,000 units.
"Comparatively speaking, the cooling in the housing activity that took place across the country in the latter half of last year was fairly modest in Manitoba -- quite vigorous housing activity persisted," said Craig Wright, RBC's senior vice-president and chief economist.
However, Wright said Manitoba's affordability indexes are still only slightly above the historical averages for the province, "suggesting that any affordability-related strain is likely minimal at this point."
The other good news, the RBC Economics senior economist said, is that homes here are still more affordable than in many other regions of the country.
"Relative to other cities and provinces, affordability still seems to be quite reasonable," Robert Hogue said. "There's nothing that would raise any alarm bells."
The RBC housing-affordability index measures the proportion of pre-tax household income needed to service the cost of owning a home, based on market value.
For example, an index of 38.1 per cent means average homeowner costs, including mortgage payments, utilities and property taxes, take up 38.1 per cent of a typical household's monthly pre-tax income. So the higher the index, the less affordable the home.
In the country's priciest regional housing market -- British Columbia -- the cost of owning a standard detached bungalow eats up 66.4 per cent of a typical household's pre-tax income, the bank said. In the second-priciest -- Ontario -- it's 42.9 per cent.
We're better off than most homeowners in Canada
HERE is how house prices and affordability in Manitoba stacked up in the fourth quarter of 2012 against those in other regions of the country for the most common type of home -- a detached bungalow:
RegionAvg. selling priceQ change* Q4 index**Q change***
* Third quarter to fourth quarter, 2012 (by %)
**Housing affordability index
*** by %
-- source: RBC Economics Research, Royal LePage, Statistics Canada