Great article to share with clients and realtors about the great shape of the Atlantic Market, especially St. John’s.

Transmitted by CNW Group on : September 9, 2009 05:00
Steady improvement for housing affordability in Atlantic Canada: RBC Economics
TORONTO, Sept. 9 /CNW/ - Housing affordability continues to improve inAtlantic Canada, although at a more moderate pace than the rest of thecountry, according to the latest housing report released today by RBCEconomics.
"The rebound in Atlantic Canada has been a more subdued affair than inmost other parts of the country, but the downturn was also more restrained here," noted Robert Hogue, senior economist, RBC. "Overall, the East Coast enjoys relatively attractive affordability levels, which should supporthousing activity in the period ahead."
RBC's Affordability measures in the Atlantic Provinces have improvednoticeably since early last year, with homeownership costs falling between 0.4and 0.8 percentage points in the second quarter. Sales of existing homes climbed more than 18 per cent since January and there has also been a moderate run-up in property values.
The report noted that St. John's continues to be among the most vibrant housing markets in Canada - although the pace has cooled in the past few months - while Halifax, Saint John and Charlottetown are displaying fairlybalanced conditions.
RBC's Affordability measure for a detached bungalow for Canada's largestcities is as follows: Vancouver 63.4 per cent, Toronto 46.5 per cent, Ottawa38.6 per cent, Montreal 37.3 per cent and Calgary 35.7 per cent.
The report also looked at mortgage carrying costs relative to incomes for a broader sampling of cities across the country, including St. John's, Halifax, Saint John and Charlottetown. For these cities, RBC has used a narrower measure of housing affordability that only takes mortgage payments relative to income into account.
The property benchmark for the Housing Affordability measure, which RBC has compiled since 1985, is based on the costs of owning a detached bungalow.Alternative housing types are also presented including a standard two-storeyhome, a standard townhouse and a standard condo. The higher the reading, themore costly it is to afford a home. For example, an Affordability reading of50 per cent means that homeownership costs, including mortgage payments,utilities and property taxes, take up 50 per cent of a typical household'smonthly pre-tax income. Highlights from across Canada:
- British Columbia: In the second quarter, housing affordability in B.C. eased once again, further extending the downward trend since the start of 2008, although homeownership costs are still significantly above long-term levels. Sales of existing homes surged by more than 125 per cent from their cyclical trough early this year. Market conditions have tightened and there has been some firming of prices.
- Alberta: The biggest cumulative drop in the history of RBC Affordability measures in Alberta deepened further in the second quarter, falling to levels not seen since before the housing boom. Existing home sales soared by more than 60 per cent between April and July, fully reversing last year's slide. Tightening market conditions should set the stage for some property value appreciation in the near future.
- Saskatchewan: Affordability has improved considerably in Saskatchewan since early last year, but homeownership costs remain above long-term averages. Regardless, sales of existing homes rebounded smartly, rising by more than 50 per cent since their lows in March. If this trend is sustained, property prices can be expected to eventually heat up as well.
- Manitoba: The notable easing of homeownership costs in the past year has fully repaired affordability in Manitoba, compared to historical averages. Resale activity ramped up during spring and summer and property prices generally maintained their steady upward trend, supported by relatively tight market conditions.
- Ontario: Solid improvements in affordability in Ontario have supported a strong upturn in the market in recent months. All affordability measures are now below historic averages, indicating that homeownership costs are at attractive levels in the province. The general tone of the market is generally positive, but local demand continues to be held back by the tough economic prospects many communities in Ontario continue to face.
- Quebec: Housing affordability improved once again in the second quarter in Quebec, prolonging a trend that has been ongoing during the past year. Sales of existing homes surged by more than 40 per cent over the cyclical low reached mid-winter. With a more upbeat market sentiment and tightening demand-supply conditions pushing property values upward, the Quebec housing market appears to be back on track.

The full RBC Housing Affordability report is available online, as of 8a.m. EDT today at www.rbc.com/economics/market/pdf/house.pdf.