Ottawa remains pricey market for home ownership.
February 17, 2004 - Ottawa remains the third most expensive city in Canada in which to own a home, Royal Bank of Canada reported Tuesday, ranking behind only Vancouver and Toronto.
In the latest edition of its Housing Affordability Index, RBC said the nation's capital ranked third with a rating of 32.2 per cent, or $1,493 a month, in the fourth quarter of 2003. That was an increase from 31.9 per cent, or $1,466, in the third quarter.
The index averages the monthly cost of carrying a mortgage, property taxes and utilities on a typical detached bungalow and expresses it as a percentage of the city's average pre-tax household income. In other words, the average Ottawa household spends 32.2 per cent of its pre-tax income on housing costs.
RBC added that the benchmark price of that typical detached bungalow in Ottawa rose by 5.9 per cent in the fourth quarter, to $220,000.
The index for Ontario crept up to 31.3 per cent in the fourth quarter from 31 per cent in the third quarter, for an average monthly payment of $1,409. The national reading for the fourth quarter was 32.2 per cent, or $1,283 per month.
The latest data reaffirms Ottawa as the third most expensive city in which to own a home in Canada.
Vancouver ranks first with an affordability rating of 46.2 per cent while Toronto comes second at 38.4 per cent.
Even though Toronto remains a more expensive market for home ownership, RBC economist Carl Gomez says pricing pressures in Ottawa have been more apparent than in Hogtown during the boom of the past few years.
"(Ottawa's) market is still very close to sellers' conditions," he said.
However, more listings are appearing on the local resale market and activity, while still strong, is slowing. Gomez expects that trend will lead to a more balanced market that will eventually slow new home construction as well.
For Ontario as a whole, Gomez said in the report that: "Low interest rates should continue to support demand, but there are now fewer potential first-time buyers left in the market. The improving trend in new listings now suggests that existing homeowners seeking to move up in the market will now take centre stage instead in 2004."
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