By Krystle Chow, Ottawa Business Journal Staff
Home affordability improved across Canada in the first quarter, bringing buyers back into the market in every major city in the country, according to a new RBC Economics report released Wednesday.
All four housing segments registered improvements in housing affordability, which meant a smaller proportion of pre-tax household income needed to service the costs of owning a home.
The most significant change was in the cost of owning a standard two-storey home, which fell to 44.7% of pre-tax income from 49.7% in the previous quarter. This was followed by a four-percentage-point improvement in the affordability of a detached bungalow, to 39.4%.
“With the turmoil in financial markets partially subsiding and the flow of credit increasing, home resale activity has rallied impressively since the late winter,” said RBC senior economist Robert Hogue in a statement. “What’s most impressive is how widespread this rebound has been, with all major cities in Canada experiencing a revival.”
The report cited large mortgage rate cuts and the federal government’s aggressive role in supporting the mortgage securities market as reasons for the declining costs of home ownership.
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