{"id":13058,"date":"2019-07-16T10:10:25","date_gmt":"2019-07-16T17:10:25","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=13058"},"modified":"2019-06-28T15:47:21","modified_gmt":"2019-06-28T22:47:21","slug":"canadian-housing-affordability-is-improving","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2019\/07\/canadian-housing-affordability-is-improving\/","title":{"rendered":"Canadian Housing Affordability is Improving"},"content":{"rendered":"<p style=\"text-align: justify;\">Canadian housing affordability continued to improve in this year\u2019s first quarter, although the situation in the country\u2019s most expensive markets remains dire, a new report suggests.<\/p>\n<p style=\"text-align: justify;\">\u201cAffordability is still dreadful in Vancouver, Toronto and Victoria. Minor signs of strain are apparent in Montreal and Ottawa but conditions are normal in all other markets we track,\u201d write RBC\u2019s Chief Economist Craig Wright and Senior Economist Robert Hogue in a Housing Trends and Affordability report.<\/p>\n<p style=\"text-align: justify;\">Each quarter of the year, RBC measures housing affordability by looking at what share of a household\u2019s median income is required to carry home ownership costs in 14 major markets, as well as on the national level.<\/p>\n<p style=\"text-align: justify;\">Canada-wide, RBC\u2019s affordability measure clocked in at 51.4 percent, meaning a typical household in the country needs to set aside a little over half its pre-tax income to afford ownership costs, which include mortgage payments, property taxes and utilities.<\/p>\n<p style=\"text-align: justify;\">The national measure eased by 0.3 percentage points in the first quarter of the year, the second-consecutive improvement. It remains up 0.2 percentage points from a year ago, although the economists see the potential for even greater affordability improvement in the coming months as a result of projected price declines in Western Canada and flattening mortgage rates, which aren\u2019t expected to rise.<\/p>\n<p style=\"text-align: justify;\">Recently, rates for five-year fixed-rate mortgages tumbled to a two-year low.<\/p>\n<p style=\"text-align: justify;\">\u201cThe improvement was widespread across local markets. Price declines in the West and parts of Atlantic Canada, as well as rising household income helped lower the bar to ownership in most markets,\u201d the bank economists note.<\/p>\n<p style=\"text-align: justify;\">It\u2019s generally recommended that households dedicate no more than a third of their income on housing.<\/p>\n<p style=\"text-align: justify;\">In the Vancouver area, a median-earning household has to fork over an eye-popping 82 percent of its income to shoulder housing costs \u2014 so despite a quarter-over-quarter decline of 1.9 percentage points and annual drop of 5.1 percentage points, ownership remains out of reach for many on the west coast.<\/p>\n<p style=\"text-align: justify;\">Victoria\u2019s measure sunk 0.3 percentage points from the previous quarter to 58.6 percent. However, it is still up 0.2 percentage points compared to Q1 2018 levels.<\/p>\n<p style=\"text-align: justify;\">Meantime, affordability worsened in the Toronto area. The measure read 66 percent, an increase of 0.3 percentage points from the final quarter of 2018 and 0.5 percentage points annually.<\/p>\n<p style=\"text-align: justify;\">\u201cSo the bar to home ownership pretty much remains as high as ever. And with prices back on a slight upward trajectory, it\u2019s unlikely to come down much, or at all, in the near term,\u201d say Wright and Hogue.<\/p>\n<p style=\"text-align: justify;\">In May, the average price of a detached home rose for the first time this year, a sign that even the hardest-hit segment of the market is showing signs of life.<\/p>\n<p style=\"text-align: justify;\">The average price of a Toronto area home, including houses and apartments, was $838,540 last month, up 3.6 percent from May 2018, according to the Toronto Real Estate Board. Sales surged 18.9 percent, with 9,989 residential properties changing hands.<\/p>\n<p style=\"text-align: justify;\">\u201cDespite kicking into gear late, the spring season brought compelling evidence that a (slow) market recovery is now underway,\u201d they add.<\/p>\n<p style=\"text-align: justify;\"><a href=\"https:\/\/www.livabl.com\/2019\/06\/canadian-housing-affordability-toronto-vancouver.html\" target=\"_blank\" rel=\"noopener noreferrer\">RBC : Canadian Housing Affordability is Improving, But It&#8217;s Still &#8220;Dreadful&#8221; in Toronto &amp; Vancouver<\/a> by Josh Sherman | Livabl<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Canadian housing affordability continued to improve in this year\u2019s first quarter, although the situation in the country\u2019s most expensive markets remains dire, a new report suggests. \u201cAffordability is still dreadful &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2019\/07\/canadian-housing-affordability-is-improving\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-13058","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Canadian Housing Affordability is Improving &#8226; 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