July 8, 2009

Canadian housing prices lure buyers

Buyers are being drawn back into the Canadian housing market by softening prices, a report published in Toronto Wednesday said.

The report, by RBC Economics, focused on the pre-tax costs of buying and maintaining a bungalow, a two-story home and a condominium.

With the turmoil in financial markets partially subsiding and the flow of credit increasing, home resale activity has rallied impressively since the late winter, Robert Hogue, an RBC senior economist, said in a news release.

In the first quarter, monthly payments on a typical detached bungalow fell nearly 17 percent from a year earlier.

RBC's index on affordability -- the lowest being best -- said bungalows were at 39.4 percent. A 50 percent ranking means home-ownership costs, including mortgage payments, utilities and property taxes, take up 50 percent of a typical household's monthly pre-tax income.

The index indicated a standard town house affordability ranking was 31.9 percent; a typical condominium, 27.1 percent; and a two-story home, 44.7 percent.