Housing affordability in Alberta jumped during the first quarter of 2015, according to a research report from RBC Economics, but buyers remain hesitant due to low oil prices and uncertainty in the market.
"Alberta's housing affordability measures stood at fairly attractive levels compared to historical averages and compared to current values in other provinces, which will likely help limit the extent of the correction in the province,” said Craig Wright, senior vice-president and chief economist with RBC. “In fact, resale activity has stabilized more recently, suggesting that the worst may be over for Alberta's housing market."
The RBC Housing Affordability Report, which captures the province's proportion of pre-tax household income needed to service the cost of owning a home at market values, saw declines across all segments in the first quarter.
Measures for Alberta fell one percentage point to 33 per cent for two-storey homes, 0.6 percentage points to 19.9 per cent for condos, and 0.7 percentage points to 31.8 per cent for bungalows – all declines that RBC attributes to sellers listing rapidly and buyers waiting in the wings for more favourable market conditions.
"Alberta's housing market experienced a particularly violent bout of anxiety in response to plunging oil prices earlier this year; sellers rushed to list homes and buyers hit pause," said Craig Wright, senior vice-president and chief economist, RBC.
"This combination dramatically loosened demand-supply conditions, driving down property values and turning the table squarely in favour of buyers in Q1."
Elsewhere in Canada, BC's housing affordability measure for a detached bungalow in Canada's largest cities in Q1 2015 was led by Vancouver at 85.6 per cent (up 2.8 percentage points from Q4 2014).
Meanwhile, Toronto remained stable at 57.3 (up 0.6 percentage points), while Montreal levelled at 37.2 (down 0.2 percentage points).
In Ottawa, the measure was 35.4 (down 0.6 percentage points) and in Edmonton, it was 32.8 (down 0.8 percentage points).