Manitoba homes still among the nation’s most affordable

Manitoba’s reputation as one of the most affordable provinces for housing remains intact, according to a new report from RBC economics.
The latest Housing Trends and Affordability report indicated housing affordability in Manitoba registered little change in the first quarter due to balanced market conditions.
“Mounting home buyer demand continued to be met with an equal-sized increase in homes being put out for sale,”said Robert Hogue, senior economist for RBC. “This sense of balance across Manitoba kept property value appreciation under control.”
The RBC report indicated that home prices changed little in the first quarter. Prices rose modestly for detached bungalows and two-storey homes, while edging lower for condominium apartments, following a sizeable gain in the previous quarter.
The RBC housing affordability measures for Manitoba, which capture the province’s proportion of pre-tax household income needed to service the cost of owning a home, were mixed in the first quarter of 2011 (an increase in measure means that owning a home is less affordable). 
The measure for the benchmark detached bungalow rose by 0.1 of a percentage point to 34.1 per cent and declined by 0.2 of a percentage point for condominium apartments to 20.3 per cent. The measure remained even for two-storey homes at 36.8 per cent.
“Manitoba is still one of only two provincial markets in Canada, along with Alberta, where measures have remained below long-term averages for all housing categories that we track,” added Hogue.
The majority of Canadian markets experienced weakened affordability in the first quarter of 2011. Most notable was the sizeable deterioration in British Columbia. More specifically, Vancouver saw significant gains in property values, which drove the already elevated cost of homeownership even higher. 
Quebec’s home buyers also faced noticeable rises in ownership costs, while those in Atlantic Canada saw their affordability advantage somewhat diminish. The picture remained mixed in other areas of the country, with Ontario, Alberta and Saskatchewan experiencing ups and downs in ownership costs, depending on the housing type.
“Despite the latest erosion in affordability, provincial levels generally continue to stand near their long-term averages, suggesting that owning a home remains affordable or, at worst, slightly unaffordable across Canada — with Vancouver being a notable exception,” said Hogue.
Rising home prices in Vancouver outpaced income gains for householders, exacerbating the market’s already poor affordability rating. The report indicated buying a home in Vancouver takes up 72.1 per cent of a purchaser’s pre-tax income. 
The RBC housing affordability measure, which has been compiled since 1985, is based on the costs of owning a detached bungalow, a reasonable property benchmark for the housing market in Canada. Alternative housing types are also presented, including a standard two-storey home and a standard condominium. The higher the reading, the more costly it is to afford a home. For example, an affordability reading of 50 per cent means that homeownership costs, including mortgage payments, utilities and property taxes, take up 50 per cent of a typical household’s monthly pre-tax income.