Housing in Saskatchewan slightly more affordable in first quarter

Housing affordability in Saskatchewan showed the biggest improvement in the country in the first quarter of 2013, but that followed a significant deterioration in the fourth quarter of last year, according to the latest housing affordability report released Thursday by RBC Economics Research.

Photograph by: Don Healy , Regina Leader-Post files

REGINA — Housing affordability in Saskatchewan showed the biggest improvement in the country in the first quarter of 2013, but that followed a significant deterioration in the fourth quarter of last year, according to the latest housing affordability report released Thursday by RBC Economics Research.

“The market is really just regaining lost ground,” said Craig Wright, senior vice-president and chief economist for RBC. “Swings in home prices have been responsible for the volatile levels of affordability in the province in the past year,” Wright said in a news release.

RBC said substantial gains in house prices in the fourth quarter were followed by widespread declines early this year. Overall, however, affordability measures in the province have trended sideways since 2009, maintaining persistent, albeit modest, pressure on prices.

RBC’s housing affordability index, which measures the proportion of pre-tax household income needed to service the costs of owning a home, declined across all three housing types in the first quarter. As a result, Saskatchewan saw a modest improvement in housing affordability in the first three months of 2013.

Specifically, the affordability measure for the benchmark detached bungalow eased by one percentage points to 38.1 per cent. For two-storey homes, the measure fell 1.7 percentage points to 41.2 per cent, while the measure for condominiums declined of 0.3 percentage points to 26.5 per cent.

By comparison, the housing affordability measure for the typical detached bungalow in Canada’s largest cities in the first quarter was: Vancouver 82.3 per cent (up 0.1 percentage points from the previous quarter); Toronto 53.8 per cent (up 0.8 percentage points); Montreal 40.1 per cent (up 0.6 percentage points); Ottawa 39.1 per cent (up 0.1 percentage points); Calgary 38.7 per cent (up 0.8 percentage points); Edmonton 30.4 per cent (down 0.2 percentage points).

The housing affordability measure, which has been compiled by RBC since 1985, is based on the costs of owning a detached bungalow, as well as a standard two-storey home and a standard condominium apartment.

The higher the reading, the more difficult it is to afford a home at market values. For example, an affordability reading of 50 per cent means that home ownership costs, including mortgage payments, utilities and property taxes, would consume 50 per cent of a typical household’s monthly pre-tax income.

 

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