Alberta’s Housing Market Most Affordable in Canada According to RBC Report
While much of Canada is seeing a slow down in the resale housing market, Alberta is enjoying a steady uptick. The Alberta powerhouse had a promising third quarter, according to a study by RBC Economic Research. The firm looks at the affordability of homes in markets across Canada and features the results in its Housing Trends and Affordability Report.
Affordability is calculated by taking the amount of before tax household income and then subtracting the amount it takes to own and maintain a home to find the left over, or otherwise disposable income. Edmonton and Calgary saw the best numbers in Canada and the best numbers in the two-storey home category since 2009. Even better, the city’s condo market also saw the best numbers since 2005.
The first part of 2012 in particular saw an increase in resales, which made the real estate market in Alberta tighten up. When inventory decreases, prices tend to increase and that is most likely going to be the case in this city.
Looking at detached bungalows, the affordability measure came in at 38.3 percent, which is 1.5 percent lower than in 2011. A two-storey property, standard category, came in at 30.3 percent, a 1.0 percent drop from last year. Condos, also in the standard category, came in at 22.7 percent, a 1.8 percent decrease from 2011.
The resurgence in the housing market is thanks to a number of factors that came together in 2012’s third quarter. Prices remained affordable, resales were steady and there was a balance between supply and demand. The prices are increasing, but at a modest rate, nothing like that seen in the boom days of the mid 2000s. The economy is likewise humming along, thanks to the energy industry as well as complementing businesses and services. The increasing jobs bring in more people, each of them needing a place to live, which buoys up the real estate market.
Looking at Alberta as a whole, RBC calculates the affordability measure for detached bungalows at 32.7 percent, a 0.9 percent decrease from last year. Two-storey homes came in at 35.4 percent, a 1.5 percent decrease and condos came in at 20.1 percent, a 1.8 percent drop. All of these figures are well below the national averages, as well as below historical averages.
Nationally, bungalows averaged 42 percent, a 0.4 percent drop; two-storey homes came in at 47.8 percent, a 0.7 percent decrease and condos showed a 28.0 percent figure, a 0.8 percent drop from 2011.