Report shows Calgary has most affordable housing market in North America

CALGARY (660 NEWS) — One consequence of economic problems in Alberta has been a continued drop in house prices — and according to a new report, it has reached a record level.

According to Zoocasa Calgary now has the most affordable housing market among all major cities in Canada and the U.S.

The report calculated the average home price in Calgary at $400,000, which would require an annual income of $57,037 to afford.

But the median income in Calgary is $94,334, which means homebuyers making that amount and buying a cheap home are left with a surplus of $40,297.

However, while this may look very attractive for a first-time homebuyer, according to an expert it is also an indication of a weaker economy.

“You have to look at affordability with a different lens,” said Ann-Marie Lurie, Chief Economist with the Calgary Real Estate Board. “I mean, yes it’s nice to say that it’s affordable, but really the demand drivers need to come down to the fundamentals.”

These fundamentals include all of the economic concerns Calgarians have been hearing about for the last few years, including unemployment, low demand and high supply.

“It’s about the change of how prices are moving, and we have seen our prices move down really since 2014. And that is very closely tied to what’s happening in our overall economy,” said Lurie. “We’ve struggled with job losses, high unemployment rates — and this has been really throughout the province. And at the same time we still had more supply than demand in the housing market and that’s why we’ve seen prices decline.”

To paint an even more complete picture, this is affecting different housing categories in different ways.

“If we look at the lower price ranges — so the most affordable product type for detached or attached or the apartment sector — we’re seeing some different trends there. So we have actually seen some improvement in sales for that affordable product, so that amount of oversupply is really different if you’re in that lower price range, and that’s going to impact pricing and price movements as well, depending on that price range you’re in,” added Lurie.

But when it comes to other sectors, there’s no expectation prices will move up soon because of a couple of factors, including lending rates.

“Those are not expected to rise this year, so that has a limited effect on affordability this year. But if prices do start to rise and we see interest rates also rising, that can also affect affordability.”

But overall, the only real change that’s needed is a boost to the economy to fix all of the current woes.

“So we’d need to see a shift in our economy to start to support that price increase, but that’s not really expected to happen this year, because it will take some time before our market moves back into more balanced conditions,” said Lurie.

The priciest housing market in Canada — and second overall in the report — is Vancouver, while Toronto is the second most expensive market in the country.