The affordability of homes across Canada was mostly unchanged in the first quarter of this year compared to the end of 2014. That’s according to a new report from the economics research arm of mortgage lender RBC. The Housing Trends and Affordability Report shows that affordability was largely down to lower
mortgage rates rather and expresses concern about the outlook for 2016 when interest rates are almost certain to rise.
“Canadian markets heavily associated with the oil and gas industry – Calgary and Edmonton in particular – were impacted earlier this year by the plunge in oil prices which tipped the market in favour of buyers due to softening home prices and ownership costs,” said Craig Wright, senior vice-president and chief economist, RBC. “At the other end of the spectrum, solid price increases continued to erode housing affordability in Toronto and Vancouver which remain Canada’s hottest markets.”
Sales between February and May this year increased 11.2 per cent with Toronto and Vancouver leading the way but there were signs of improvement for Montreal, Ottawa and some of the other softer markets. BC and Ontario’s strength should offset weakness in Alberta and Saskatchewan this year RBC believes.
The report indicates that affordability generally remains neutral in Canada, with limited signs of stress being exerted on home buyers outside Vancouver and Toronto. RBC’s measures are still quite close to their long-term averages, suggesting that current conditions are within historical norms.
Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate
More market watch: