Worst quarterly deterioration of housing affordability on record for Saskatchewan: RBC
RBC’s most recent housing affordability survey was released yesterday and it should come as no surprise that Saskatoon and Saskatchewan once again received special attention showing some of the sharpest erosion of affordability when compared to other markets across Canada.
A quick look at the “mortgage carrying costs by city” charts appears to indicate that servicing a mortgage on a Saskatoon home requires a larger percentage of income than 15 of the 20 cities represented in the survey results. Ouch! Home owners in Victoria, Vancouver, Calgary, and Toronto pay a larger percentage of income. Though it’s tough to tell from these graphs, we may now be less affordable than Edmonton.
It’s also worth noting that these results represent changes to the end of the second quarter of 2007, and that Saskatoon continued to see some increases through the third quarter while other western markets experienced considerable cooling. I expect that we’ll see affordability deteriorate further in the next report, though likely not as significantly as we have over the last two.
Here are a few of the highlights from this report.
“Homeownership costs continued to climb steadily with Canada’s housing affordability sharply eroding across all four housing types in the second quarter, according to the latest Housing Affordability report released today by RBC Economics.”
The report goes on to say, “Saskatchewan, Alberta and British Columbia witnessed the most significant erosion in housing affordability. Affordability deteriorated by approximately 20 per cent across each of the home segments in Saskatchewan, marking the worst quarterly deterioration on record. Over the past couple of years, Saskatoon, Edmonton and Calgary have suffered the largest deteriorations of all Canadian cities.”
“Housing markets conditions from Manitoba eastward are not a cause for concern, but conditions in Saskatchewan, Alberta and British Columbia warrant caution given the speed of the massive turnaround in affordability in several key cities. The economic fundamentals are supportive, but have been priced in fairly aggressively. In our view, a continued cooling in the pace of price gains and an ongoing pull back in sales-to’ listings ratios lie in the cards in these cities.”
Read the RBC Housing Affordabilty report here
Read the overview specific to Saskatchewan
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Norm Fisher
Royal LePage Saskatoon Real Estate
There's 2 Comments So Far
April 9th, 2009 at 9:08 am
No real suprise there. A 50% increase in housing tends to do that.
I’m getting a little excited about the next few weeks of stats. Norm, have you noticed a slight increase in activity the past week? In July and August a lot of property I inquired about was available. It seems like this past week 85% of what I’ve looked in to has pending offers. I recently asked about 6 properties the past 2 days ( All of which had been on the market only a few days ). Every one of them is sold, 1 of them got 10 offers on it.
April 9th, 2009 at 9:08 am
Smart ass!
Interesting observations. I am seeing a bit of a surge in traffic on my website and the phone has certainly been ringing a bit more again. What’s most interesting is that most of the calls and emails are coming from out of the city again. A few investors, and several “moving to Saskatoon” inquiries. I’m not sure that it means much but I’m sure the numbers will tell more of the story.
It doesn’t look like sales are lighting the world on fire. We’re showing just over 50 for the first few days of the week. It’s almost ceratin that the sales numbers will be higher than last week but I expect total inventory will also be up. We crossed the 600 mark today for the first time this year.
Only 6 of 26 new listings today have the “delayed presentation” of offers note so buyers who want to purchase will have to be on the ball and start inquiring on new listings quickly.