Housing Affordability To Improve In 2008, Says RBC Economics

According to RBC, new record highs for the amount of household income going towards homeownership costs are being set across most housing classes in British Columbia, Alberta and Saskatchewan. While their provincial economies are strong, the gains have been increasingly leveraged. The Saskatchewan-Manitoba border remains the dividing line between over-heated housing markets in Canada: everything from Manitoba eastward remains well below previous record highs for affordability set in the late 1980s and early 1990s. Canada's rate of resale house price appreciation is likely to slow to between five and seven per cent in 2008. New home construction volumes and income growth are also expected to decline. The popular five-year mortgage rate is anticipated to drift about 50 to 75 basis points lower by year-end, and the Bank of Canada's overnight rate is forecast to drop by a further 100 basis points. RBC's Affordability measures for a detached bungalow for Canada's largest cities are as follows: Vancouver, 72 per cent, Calgary, 46 per cent, Toronto, 46 per cent, Montreal, 37 per cent and Ottawa, 32 per cent. . . . The full RBC Housing Affordability report is available online, as of 8 a.m. E.S.T. today at www.rbc.com/economics/market/pdf/house.pdf. ... http://www.newswire.ca/en/releases/archive/January2008/24/c3759.html

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