Even though home ownership became less affordable for Canadians in the second quarter of 2013, the Royal Bank of Canada (RBC) is reporting that rising prices haven’t put much of a damper on the market.
Nation-wide, RBC’s affordability measure for the detached bungalow rose 0.3 percentage points from the first quarter to 42.7 per cent and two-storey homes rose by 0.4 percentage points to 48.4 per cent. Condo affordability remained unchanged at 27.9 per cent.
But the chill in housing starts and resales that the market felt in late 2012 and early 2013 seems to have come to an end with second quarter resales rising 6.4 per cent from the previous quarter. The bank believes low interest rates are behind the unstoppable sales.
“Resales should stabilize close to the recent not-too-hot, not-too-cold levels in the near-term, barring any further changes in housing policy by the federal government,” said Craig Wright, senior vice-president and chief economist, in the news release.
Here’s how the major cities fared, using the detached bungalow as a benchmark for affordability:
- Vancouver remains the least affordable city in the country with an index of 82.1 per cent. Its increase of 2.2 percentage points from the previous quarter was the largest jump measured among the cities.
- Next on the list is Toronto, which saw a 0.5 increase to 54.5 per cent.
- Montreal became slightly more affordable thanks to a 0.7 per cent decline to 38.1.
- Ottawa was up 0.5 percentage points to 37.1.
- Edmonton saw the second highest increase, moving up by 1.8 percentage points to 34.
- Calgary remained unchanged at 33.
For more info, check out the summary tables below:
Photo: Gamma Man/Flickr