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Tightened conditions may lead to higher prices

CALGARY — The Calgary-area housing market bucked the slowing trend in home resales seen in other Canadian markets in the third quarter with steady activity relative to the previous quarter and an improving trend in affordability, says the latest Housing Trends and Affordability Report by RBC Economics Research.

 

RBC measures for affordability, which captures the proportion of pre-tax household income needed to service the costs of owning a home at going market value, eased in the Calgary area to multi-year lows. Early 2009 was the last time two-storey homes had a measure this low and the measure for condominiums is at its lowest level since late 2005.

 

“A significant pickup in resales during the first half of the year considerably tightened Calgary’s market conditions, which may eventually lead to stronger upward pressure on home prices in the city,” said Craig Wright, senior vice-president and chief economist with RBC.

 

In Calgary, the measure for a detached bungalow was 38.3 per cent, down 1.5 per cent from last year. A standard two-storey home saw its measure drop by 1.0 per cent to 39.3 per cent and a standard condominium fell by 1.8 per cent to 22.7 per cent.

 

RBC said Alberta’s housing market enjoyed a strong resurgence in activity thanks to an unusual mix of favourable factors in the third quarter of this year. The report said attractive and improving affordability, firm and steady resales, balanced demand and supply, and moderate price increases in the province are a far cry from the prolonged market slump that followed the mid-2000s boom.

 

“Underpinned by a vibrant provincial economy and strong population growth, we expect that Alberta’s recent housing renaissance is likely still in its initial stages,” said Wright. “Strong economic growth is forecast to continue into 2013, which bodes well for further advances in the provincial housing market next year.”

 

The RBC measure in Alberta for a detached bungalow fell 0.9 per cent from last year to 32.7 per cent. It dipped by 1.5 per cent for a two-storey to 35.4 per cent and fell by 1.8 per cent for a condo to 20.1 per cent.

 

“Alberta’s housing affordability continues to be in a great position. With provincial measures standing below both historical averages and national averages, it’s quite an attractive regional picture,” added Wright.

 

At the national level, the RBC measure for all housing categories dropped from a year ago: by 0.4 per cent for a bungalow to 42.0 per cent; by 0.7 per cent for a two-storey to 47.8 per cent; and by 0.8 per cent for a condo to 28.0 per cent.

 

 

mtoneguzzi@calgaryherald.com

Twitter:@MTone123



Read more: http://www.calgaryherald.com/business/Calgary+housing+market+picks+activity+affordability+improves/7594131/story.html#ixzz2CyODzNEW

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