The RBC Housing affordability index for the second quarter was released last week and had some interesting revelations. While Saskatchewan's affordability index is still below the national level it did erode somewhat and it is now higher than seven of ten provinces. Only B.C. And Ontario are higher. What does this mean? Well, it means houses are going up in value slightly more than wages (during the time the stats are collected)and that it takes, on average just over 39% of your salary to carry the costs of a home in Saskatchewan.
Does this mean it's too expensive to buy and that everyone should now rent until prices go down - NO! While averages and stats such as this are instructive, they don't tell the whole story. First of all, the index is based on a Saskatchewan average - individual markets from Regina to Estevan to Lloydminster to Esterhazy to Swift Current, etc. are all combined to come up with that number. As everyone knows, both the housing market and the wage scale can vary greatly from area to area and a provincial average tells us nothing about specific locations. One article compared the Saskatchewan index with Calgary and Edmonton with the headline "Sask Homes More Expensive Than Calgary and Edmonton". While this may be correct statistically (based only on the one index) it is not very instructive.
There is an old saying in the real estate world "it's not what you buy it for it's what you sell it for that matters". If you think homes or investment property in your area are likely to increase in value over the time you expect to own it, then it's probably not a bad time to buy.
The RBC Report can be found here: http://www.rbc.com/economics/market/pdf/house.pdf
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