According to the latest Housing Trends and Affordability Report released by RBC Economics Research, homeownership across Canada became slightly more affordable in the third quarter of 2014.
“Owning a home was a bit easier in Q3 thanks to rising household incomes, low and steady interest rates and cheaper utility costs in many parts of the country – Toronto even saw some relief,” said the senior vice president and chief economist for RBC, Craig Wright, in RBC’s report. “With home resales hitting close to the highest levels since early 2010, the overall tone of Canada’s housing market is quite solid at this stage.”
The number of resales across Canada increased during October for the eighth time in nine months, which is mostly due to demand surpassing supply in markets like Toronto, Calgary and Vancouver.
“A combination of gradually increasing interest rates and higher prices will likely reverse the improvement in housing affordability that took place in the past year and weigh more and more heavily on homebuyer demand in Canada,” Wright continued. “We expect the next stage of the housing cycle to be a transition toward lower resales and slower price increases.”
Affordability fell by 0.2 points to 47.8 per cent for two-storey homes on a national level, and by 0.3 points to 27.1 per cent for condos.
“A trend that jumped out in the latest data was a further broad improvement in affordability of condos where a strong majority of markets across Canada saw the measure for the segment fall,” he said. “Condos no doubt continue to be the more affordable ownership option in every market.”