Oil-fuelled Slowdown Improves Housing Affordability in Calgary

Plunging oil prices boosted housing affordability in Calgary during the first quarter of 2015, says RBC Economics.

Its latest housing trends report, released Monday, said falling energy prices shook the confidence of both buyers and sellers — reversing a trend of rapid price increases and swinging the market sharply in favour of buyers.

Recent developments suggest that housing activity stabilized in spring, and the market will be shaped by news on the economy and the job market in particular over the coming months.

RBC measures affordability using the proportion of pre-tax household income required to service the mortgage of an average home, including principal and interest, property taxes and utilities.

In Calgary, the affordability measures improved in all categories: Condos fell 0.6 points to 19.4 per cent, two-storey homes declined 1.5 points to 32.6 per cent, and bungalows dropped one point to 32.8 per cent.

The Calgary Real Estate Board has logged 1,550 MLS sales through Sunday, a decline of 19 per cent from the same period a year ago. The average sale price was down 2.9 per cent to $482,691.

RBC Economics said sales activity in Calgary has improved in recent months.

Alberta saw affordability measures improve in all categories as well: Condos were down 0.6 points to 19.9 per cent, two-storey homes declined one point to 33 per cent, and bungalows dropped 0.7 points to 31.8 per cent.

At the national level, RBC said affordability measures improved slightly: Condos were down 0.2 points to 27.1 per cent, two-storey homes declined 0.2 points to 47.9 per cent and detached bungalows were unchanged at 42.7 per cent.

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