There is now “light at the end of the tunnel.” That is how RBC Economic Research’s June report described the state of Calgary’s troubled housing market.
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According to the report, there was an uptick in resale activity in April and May, and a strengthening provincial economy is expected to boost homebuyer demand for the remainder of the year.
However, the share of household income required to cover home ownership costs in Calgary saw little change at 39.7% in the first quarter of 2019 — just 0.4% lower than the previous quarter and slightly down the long-run average of 40.6%.
“Affordability considerations are unlikely to stand in the way of any market recovery. That’s because ownership costs are largely in line with historical norms,” reads the report.
RBC also noted the Edmonton market was seeing similar positive activity, bouncing back this spring after an eight-year-long low.
“If sustained, these developments should progressively bolster confidence in the Edmonton market. A lack of confidence has been a bigger issue than affordability,” the report continues.
Edmonton’s income-to-cost ratio was more affordable than Calgary’s, hovering at 34.3% in the first quarter, representing a 0.3% decrease from the fourth quarter of 2018 and the first decline in almost three years.
Both Albertan cities have by far some of the most affordable metrics for housing in Canada’s biggest cities. Vancouver has the highest share at 82%, followed by Toronto at 66%, Montreal at 44.3%, and Ottawa at 41.1%. The national average is 51.4%.