For the second consecutive quarter, B.C.’s housing affordability has improved “noticeably,” according to a new RBC Economics Research report.
“Affordability improvements across most housing types in the fourth quarter were welcome news to prospective buyers in British Columbia,” said Craig Wright, senior vice-president and chief economist with RBC.
“Still, the market has a long way to go before affordability reaches less stressful levels,” he added.
The latest Housing Trends and Affordability Report, released this morning, said that B.C.’s high real-estate prices were a key factor driving an 11.9% drop in provincial home resales last year. It found that the province’s home prices fell between 0.8% and 4.0% compared with 2011.
“Much of the cooling that took place in B.C. is owed to the Vancouver area, where affordability tensions are by far the greatest,” Wright said.
RBC’s housing affordability measures look at what proportion of the province’s average pre-tax household income is needed to cover the costs of owning a home at market values. RBC found that, province-wide in 2012’s fourth quarter, that measure:
- fell 1.0 percentage points to 66.4% for detached bungalows;
- fell 1.1 percentage points to 33.4% for condominium apartments; and
- edged up 0.4 percentage points to 72.7% for two-storey homes, following a “substantial” 3.2 percentage point decline in the third quarter of 2012.
For the same period in Vancouver, RBC found that the measure:
- fell 2.6 percentage points to 82.2% for detached bungalows;
- fell by 1.2 percentage points to 41.8% for condominium apartments; and
- fell by 0.8 percentage points to 87.8% for two-storey homes.
