November 22, 2018 6:00 am

Alberta remains affordable for homeowner hopefuls: study

Homes for sale in an Alberta community.


A new study by a national real estate company suggests housing affordability in Alberta has remained steady, as wages have kept pace with home prices.

The Zoocasa data indicated an Albertan earning at least the median household income would be able to afford a home in all of the province’s 25 major markets.

To determine home affordability in each community, Zoocasa said it used the average home price reported by local real estate boards in October, and calculated how much a would-be homeowner would need to earn in order to qualify for a mortgage on that home. The company then calculated the minimum income required to buy the home in each region, and compared the figure to actual incomes reported by Statistics Canada.

The numbers were based on a 20 per cent down payment, a mortgage rate of 3.33 per cent and a 30-year amortization.

Story continues below

READ MORE: 2 years after wildfire, insurance frustrations flare up during Fort McMurray rebuild

Fort McMurray ranked as the most affordable market out of the top 25, with the minimum median income required being $51,066 and the actual median income of $195,656 based on a $374,360 home.

The least affordable Alberta community, according to the survey, was Canmore with $94,998 being the minimum median household income required to purchase $696,421 home, and an actual median household income of $98,906.

READ MORE: Affordable housing plan sparks backlash in Canmore

Calgary ranked as the second-least affordable market with a minimum median income of $63,925 compared to the actual median income of $97,334, with the average price of a home being $468,634.

The company’s data indicated Lethbridge was the third-least affordable market in the province with the minimum median household income at $40,055 to purchase the average-priced home of $293,640, with the actual median household income sitting at $74,084.

Edmonton ranked fifth on the list with the median income required to purchase an average priced home of $364,102 being $49,667, with the actual median household income of $87,225.

READ MORE: ‘It’s a buyer’s market’: Edmonton Real Estate Association

Medicine Hat was the fourth-least affordable community, according to the data.

READ MORE: Study suggests Fort McMurray most affordable housing market in Alberta; Canmore least

Zoocasa released a report in August on housing affordability in Alberta. It calculated the home price-to-income ratio in each major Alberta market and compared it to the median single- and dual-or-more household income earned in that region.

While the most recent study is similar, Zoocasa said this report calculates the gap between actual median incomes and the income that Albertans would need to afford a mortgage.

Zoocasa said housing affordability in Alberta is relatively healthy, especially when it’s compared to the affordability in British Columbia and Ontario, which are the priciest provinces in Canada.

Using the same criteria, Zoocasa’s data indicated only four of 19 markets were affordable in B.C.: Prince George, Kamloops, Campbell River and Langford.

In Ontario, nine of 28 markets were affordable when purchasing the average-priced home with the median income.

Report an error


Want to discuss? Please read our Commenting Policy first.