We’re usually proud to see Canadian cities place on Top 10 lists like The Economist’s “Most liveable cities” list. But while people around the globe see Toronto and Vancouver as great places to live, for many residents, they are very unaffordable.
The latest Demographia International Housing Affordability Survey ranks Vancouver as the third-most unaffordable city in the world, keeping its rank from 2016.
The survey uses median house prices and median household incomes in the cities to calculate a “median multiple” ratio and ranks cities based on whether the average person can afford to buy homes there. A value of 3.0 or lower is considered affordable. Vancouver’s median multiple stands at 11.8. It comes in behind Hong Kong at 18.1 and Sydney, Australia at 12.2.
With a median multiple of 7.7, Toronto is slightly more affordable, but Demographia still pegged it as “severely unaffordable” — just like Vancouver. The report notes that house prices in each city saw year-over-year increases equivalent to a whole year’s household income.
The rest of Canada’s major cities are also considered unaffordable, with Montreal (4.8), Calgary (4.6), and Edmonton (4.1) all earning “seriously unaffordable” ratings. Even Ottawa-Gatineau (3.9), the most affordable major market in the country, still earned a rating of “moderately unaffordable”.
The report notes that house prices in each city saw year-over-year saw increases equivalent to a whole year’s household income
The most affordable Canadian markets are Moncton (2.1) and Fredericton (2.2). Others rated “affordable” include Charlottetown, Moose Jaw, Saguenay, Saint John, Sudbury, Thunder Bay, Trois-Rivières, and Windsor.
The ratings don’t come as much of a surprise after the Canada Mortgage and Housing Corporation (CMHC) issued a strong warning for the national housing market last year. Toronto and Vancouver’s high prices have forced buyers into surrounding markets, and pushed those markets into unaffordable territory as well. The survey notes that even relatively minor markets like Hamilton, Oshawa, Guelph, Peterborough, and Victoria are unaffordable.
The report goes on to say that Vancouver in particular displayed the worst affordability deterioration of any major market in the survey’s history, more than doubling its rating since 2004 from 5.4 to 11.8.
Federal and provincial governments have taken actions to address housing prices and dangerous market conditions over the past year. The situation, however, has yet to improve as prices keep going up.