Home affordability on decline in Manitoba

Manitoba's home costs increased in the first quarter of 2010, with housing affordability measures moving above long-term averages for almost all housing types, according to the latest housing report released earlier this month by RBC Economics Research.

“Continued strong real estate activity in Manitoba caused prices for most housing types to surge in the early part of the year,” said Robert Hogue, senior economist, RBC.

“As a result, home affordability generally worsened in the province in the first quarter of 2010.”

RBC's Housing Affordability measures for Manitoba, which capture the province's proportion of pre-tax household income needed to service the costs of owning a home, climbed in three of the four housing categories (a rise in the measure means a loss of affordability).

The measure for the benchmark detached bungalow moved up to 37.0 per cent (a rise of 1.8 percentage points over the previous quarter), the standard townhouse to 24.8 per cent (up 1.3 percentage points) and the standard condominium to 22.2 per cent (up 0.6 of a percentage point).
The measure for a standard two-story home remained unchanged at 39.0 per cent.

“Affordability in the province has reached a point where further deterioration may temper housing demand,” Hogue said.

RBC's Housing Affordability measure for a detached bungalow in Canada's largest cities is as follows: Vancouver 73.4 per cent, Toronto 49.1 per cent, Ottawa 40.3 per cent, Montreal 39.7 per cent, Calgary 36.5 per cent and Edmonton 32.0 per cent.

The Housing Affordability measure, which RBC has compiled since 1985, is based on the costs of owning a detached bungalow, a reasonable property benchmark for the housing market.

The higher the reading, the more costly it is to afford a home.

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