It might come as a surprise to people who have been house hunting in Calgary lately but a new report says the city's residential real estate market is more affordable than most.

According to the Royal Bank of Canada, Calgary’s house prices are the third highest in the country.

However, the report still ranks the city's housing market as one of the most affordable compared to other major centres in Canada.

Craig Wright, RBC’s chief economist, said the seeming anomaly is a reflection of a strong economy where household incomes are keeping up with housing costs in Canada’s energy capital.

"Yes, housing prices have moved up. But income gains are much stronger and that makes carrying a home more affordable,” he said.

But David Watson, the head of Attainable Homes — a non-profit organization in Calgary that helps middle-class home-buyers with down payments, says he is worried about where the market is headed.

"It's nice if you're in the oil and gas industry and you have two incomes, and Calgary's got a booming economy and lots of people coming here, but … city workers, provincial workers, teachers, nurses they're going to be priced out of the Calgary market."

The Royal Bank report looked at data from the last three months of 2013.

It found that owning a detached bungalow in Calgary would take up 33.8 per cent of the average household's income.

That's compared to 55.6 per cent in Toronto and 81.6 per cent in Vancouver.

The bank predicts those numbers will increase because mortgage rates are expected to start rising this year. 

Corrections

  • The Royal Bank report found that owning a detached bungalow in Calgary would take up roughly 33.8 per cent of the average household's income, not 40 per cent as originally reported.
    Feb 26, 2014 1:56 PM MT