Vancouver housing ranked among world's least affordable
Six Canadian cities on an international survey are described as having severely unaffordable housing, with Vancouver listed as the second-most unaffordable in the world behind Hong Kong.
Demographia, a U.S.-based consultancy that focuses on urban planning issues, compiled a list comparing real estate affordability in 337 world cities based on what they call the "median multiple" — the number of times house prices are larger than average salaries.
"In affordable and normal housing markets, house prices do not exceed three times annual household incomes," the report reads. "If they do exceed this standard, it indicates that there are political and regulatory impediments to the supply of new housing that need to be dealt with."
Thirty-five Canadian cities were included in the ranking.
Overall, Canada's median multiple score came in at 3.6, up slightly from last year's 3.5 figure and enough to make Canadian real estate "moderately unaffordable," Demographia says.
All in all, Canada had eight affordable markets, 17 moderately unaffordable markets, four seriously unaffordable markets and six severely unaffordable markets. Those six are:
- Abbotsford, B.C.
- Kelowna, B.C.
Demographia says that figure would have been higher were it not for a slowdown in Vancouver, with its "grossly overvalued market" resulting in a median multiple score drop from 10.6 to 9.5.
However, Vancouver's score was still high enough to rank it second overall on the list, behind Hong Kong. Sydney, Australia, was third internationally.
In addition to Vancouver, Canada's two largest metropolitan areas are reasons for concern, Demographia says. Toronto's score of 5.9 is up from 5.1 last year and two-thirds higher than 2004.
"Montreal continues to have severely unaffordable housing, with a median multiple of 5.2, and has recently adopted even more stringent urban containment regulation, could retard housing affordability even more in the future," the report reads.
Vancouver housing is second-least affordable in the world, study finds
Metro Vancouver has the second- least-affordable housing in a world study of 337 metropolitan markets.
Hong Kong is the runaway leader in the markets with a population in excess of one million in the ninth annual Demographia International Housing Affordability Survey, written by Wendell Cox of the U.S. and Hugh Pavletich of New Zealand.
The survey rates affordability using what it describes as the Median Multiple — which is the median house price divided by gross, before-tax median household income. All prices and incomes are in local currency.
Hong Kong’s median multiple was 13.5, which was derived from a median price of $3,810,000 and median household income of $282,000.
Metro Vancouver’s median multiple was 9.5, with its median price of $621,300 and median household income $65,200.
Rounding out the top five least affordable major cities were Sydney, Australia; San Jose, Calif. and San Francisco-Oakland.
The most affordable major market was Detroit, where the median multiple was 1.5 from a median price of $75,700 and a median household income of $49,800.
The Ottawa-Gatineau area of Ontario and Quebec was Canada’s most affordable major market, finishing 159th on the list with a multiple of 3.5 from a median price of $287,100 and median income of $81,100.
Montreal was tied for 263 on the list with Sheffield and South Yorkshire in the U.K, with a median multiple of 5.1. The median price in Montreal was $287,300 and the median income was $56,700.
The remaining Canadian entry among major markets was Toronto, which tied for 296th on the list with Perth, Australia, with a median multiple of 5.9. Toronto’s median price was $430,200 and its median income was $73,300.