Two new housing affordability reports released Wednesday offered a similar viewpoint: Canada's housing market is beginning to level off and prices are shifting in favour of buyers.

Scotiabank's Adrienne Warren, a senior economist and real estate specialist with the bank, said the market is cooling but still remains in better shape than many international markets.

"I'm fairly encouraged by what we're seeing in the Canadian housing market currently. Essentially we're looking at sales that have largely levelled-out over the last year or so but still it's quite a healthy pace of build, essentially really in line with the 10-year average," Warren said at the Real Estate Outlook and Trends Forum in Toronto.

Prices are easing, she said, as the combination of higher prices, tighter mortgage regulations and slowing job growth have a cooling effect on demand.

"In general I think we're looking at a relatively level pace of activity and as far as I'm concerned I think that's about the best-case scenario -- that we could see a still healthy housing market that supports the overall economy but not one that continues to heat up."

Warren did warn that if job growth slows significantly, or household debt spikes, the housing market would suffer.

RBC housing affordability report

Meanwhile in a separate report also released Wednesday, the Royal Bank said it became slightly more affordable to own a home in Canada for the second straight quarter.

The RBC Housing Trends and Affordability Report found that at the end of 2011 home prices eased off and income increased -- two forces that combined to give a break to the market.

"The improvement in affordability was modest for the most part, but still significant enough to dial back the deterioration that impacted the market in spring last year," said Craig Wright, senior vice-president and chief economist, RBC.

Wright added that the cost of owning a home represented less of a "pinch" on household budgets in the fourth quarter of 2011, following an earlier improvement in the third quarter.

National affordability levels took a major hit in the first half of 2011, the report says, mostly driven by steep real estate price increases in Vancouver.

However, prices in the city eased in the second half of 2011 and aligned more closely with those in housing markets across the country.

Wright said the report predicts home affordability across the country will continue to improve going forward, largely due to low interest rates.

"At this point, housing in Canada is essentially as affordable as it was a year ago, and only slightly less affordable on average than it has been over the long term," Wright said. "All things considered, the housing market is sitting in a reasonably balanced position overall, despite some minor stress being exerted on housing demand."

Benjamin Tal, deputy chief economist with CIBC World Markets, told CTV's National Affairs Wednesday that the Canadian housing market is "overshooting," but won't be crashing anytime soon because the Bank of Canada is unlikely to increase interest rates and risk hurting the economy.

Canadians may not be carrying as much debt as they did a few years ago, but they're not necessarily getting ahead financially because incomes aren't rising, Tal said.

"Even during the recession, income in Canada was rising faster than it is now. So it's not a debt situation, it's an income situation," he said.

Because of that, Canadians "are much more sensitive to the risk of high interest rates," he said.

The RBC Housing Affordability Measure uses the cost of owning a detached bungalow as a benchmark to measure affordability and comes up with a percentage that represents the portion of pre-tax household income required to cover ownership expenses.

Following are the results for some key cities across Canada (change from previous quarter in brackets):

Vancouver: 86 per cent (-4.6 percentage points)

Toronto: 52.2 per cent (-0.1 percentage points)

Montreal: 40.1 per cent (-0.7 percentage points)

Ottawa: 40.9 per cent (-0.1 percentage points)

Calgary: 36.7 per cent (-0.7 percentage points)

Edmonton: 32.8 per cent (-0.3 percentage points)

Halifax: 32.6 per cent (-0.3 percentage points)

Interestingly, despite the fact Vancouver saw the largest improvement in affordability, it remained the least affordable city in Canada to own a home with estimated home ownership costs eating up the lion's share of a typical household's monthly income.

That will likely serve as a deterrent to prospective Vancouver buyers going forward, which could further improve prices, RBC suggests.

In Alberta, which enjoyed one of the more affordable housing markets in Canada, there was a notable hesitancy among buyers, the report said. That's unlikely to last, however.

"Going forward, a strong labour market and affordable housing should shake off any hesitation that Alberta homebuyers may have," the report said.

Calgary's housing market was relatively flat in the fourth quarter of 2011, which was surprising considering the fact 31,000 new jobs were created in the city in 2011.

Saskatchewan saw a surge in home resales, with affordability improving across most types of housing.

Manitoba was the only province to record a slight deterioration in affordability in Q4, with high demand tightening conditions and driving up prices, particularly for two-storey homes and condominiums.

In Ontario sellers continue to hold the upper hand, with high demand among buyers despite the above-average proportion of household income required to own a home in the province.

"This does not appear to be a strain on homebuyers in the province at this stage. Home resales advanced at a good clip in the fourth quarter and the tight availability of homes gave sellers the upper hand," the report said.

Housing affordability in Quebec remained stable in the fourth quarter of 2011, while Atlantic Canada saw an increase in resale activity based on two consecutive quarters of improving affordability.

While markets across the Atlantic Canada region were generally balanced, St. John's saw a surge in growth near the end of 2011, along with Halifax -- which may have been attributable to a successful bid for a major shipping contract worth $25 billion.

"This puts Halifax ever closer to becoming a seller's market, while buyers still have the upper hand in Saint John," said Robert Hugue, senior economist at RBC, in a release.