Homeownership costs in Alberta have dropped, reaching levels which were not seen since 3 years ago. This has further boosted the resale market according to the latest second quarter housing affordability report which was released by RBC Economics on September 9th.
This is the largest cumulative drop in the history of RBC Affordability measures in Alberta. As a result of this, buyers have begun to get back into the housing market since spring sending existing home sales reaching over 60% between April and July.
RBC’s Housing Affordability measure for Alberta shrank by 0.2-0.5 percentage points, which depends on the housing type. It measures the proportion of pre-tax household income that is needed to service the costs of owning a home.
Affordability for a detached bungalow moved down to 33.4%, a standard townhouse went down to 25%, a standard condo went down 21.9% and the standard two-storey home went down 33.6%.
The sales for existing homes in Calgary has picked up through spring and summer. Data shows that for the first time in two years, the balance of supply and demand is slightly favouring sellers. RBC’s Affordability measures for Calgary show that the second quarter eased once again by 0.1 – 0.3 percentage points.
RBC’s Affordability measures help determine the cost of affording a home; when the reading is higher, it means it is more costly to afford a home. Therefore, when it was said that a standard condo affordability went down to 21.9%, it means that it takes up to 21.9% of a typical households’ monthly pre-tax income to afford homeownership costs. This includes mortgage payments, utilities and property taxes.
Glen Chapman
Broker of Record with Club “100″ GMAC Real Estate
www.club100realestate.com
