Despite recent flooding, Calgary’s housing market continues to chug along according to a new report from RBC.
Thanks to a strong economy, solid labour market, rising population and continuing attractive affordability, RBC’s Housing trends and Affordability report showed monthly resale activity increased for six straight months, while affordability levels in Calgary continue to be among the better in Canada.
“Despite the fact that the market has kicked into higher gear since spring – thereby boosting prices and increasing ownership costs – Alberta continues to be a relatively affordable market,” said Craig Wright, senior vice-president and chief economist, RBC. “We will likely see some disruptions in market activity trickle through in summer data from the floods in southern Alberta; however, we anticipate the strong provincial economy will endure, supporting further housing growth in 2014.”
In the second quarter of this year, RBC’s measures showed little movement in Calgary, remaining unchanged for bungalows, rising modestly by 0.5 percentage points for two-storey homes, and edging lower by 0.2 percentage points for condominium apartments.
RBC’s housing affordability measure shows the proportion of median pretax household income that would be required to service the cost of mortgage payments, property taxes and utilities.
According to the measure, the standard detached bungalow would require the average Calgarian to part with 33 per cent of their household income ($90,600), while purchasing a standard two-storey would take up 33.6 per cent of the qualifying income of $92,200. The average condo would require just 19.4 per cent of the qualifying household income, which RBC puts at $53,300.
On a quarterly basis, the report indicated home resales in Calgary posted their second-strongest gain in four years in the second quarter of 2012, rising by 12 per cent. Vancouver remained the poorest market in Canada for affordability in the report, with the average bungalow and two-storey home requiring 82.1 and 85.8 per cent of median pre-tax household income, respectively.
The measures are based on a 25 per cent down payment on a 25-year mortgage loan at a five-year fixed rate.