Photo: Michael Yang/Flickr
A new international survey by Demographia shows that Vancouver experienced the greatest deterioration in affordability last year among major global housing markets.
As of the third quarter of 2017, Vancouver ranked third for the worst middle-income housing affordability out of 92 major housing markets across the globe, according to the 14th Annual Demographia International Housing Affordability Survey, published on Sunday.
Through the survey’s 14-year history, only Hong Kong and Sydney have recorded affordability levels worse than Vancouver’s.
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“Vancouver had already developed a severely unaffordable housing market in the first Survey (2004), which has been associated with its urban containment policy, adopted about five decades ago,” authors Wendell Cox and Hugh Pavletich write in the report.
The annual survey rates middle-income housing affordability using the “median multiple,” which is the median house price divided by the median household income. The survey covers 293 metropolitan housing markets, including 92 major markets from a total of nine countries.
With a median multiple of 12.6, Vancouver ranks as the third most unaffordable market in the survey, following Hong Kong (19.4) and Sydney (12.9).
A median multiple of 3 and under is considered affordable, whereas a rating of 5.1 and over is considered severely unaffordable.
Out of all markets surveyed, Vancouver experienced the highest level of housing affordability deterioration with its median multiple rising by more than 2.35 times, from 5.3 in 2004 to 12.6 in 2017.
Demographia says this increase is comparable to 7.3 years of pre-tax median household income.
Toronto made the list as Canada’s second least affordable market, with a median multiple of 7.9, compared to 3.9 in 2004.
Overall, Canada’s six major markets — Toronto, Montreal, Vancouver, Ottawa, Calgary and Edmonton — have a median multiple of 4.3.
Of all 46 Canadian housing markets included in the survey, Moncton, New Brunswick ranked as the most affordable market in Canada for the sixth year in a row with a median multiple of 2.1.