In not-so-surprising news, the latest Demographia study names Vancouver as the third least affordable city in a study of 293 metropolitan housing markets. It ranks just behind Hong Kong and Sydney.
Demographia’s 14th annual International Housing Affordability Survey, released Jan. 22, looked at nine countries — Australia, Canada, China, Ireland, Japan, New Zealand, Singapore, the United Kingdom and the United States — for the third quarter of 2017.
The survey rates middle-income housing affordability using the “median multiple,” which is the median house price divided by the median household income.
“Historically, liberally regulated markets have exhibited median house prices that are three times or less that of median household incomes, for a median multiple of 3.0 or less,” according to a press release from Demographia.
Vancouver earned a median multiple of 12.6, compared to 19.4 for Hong Kong and 12.9 for Sydney.
“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,” the Demographia report states. “Vancouver has experienced the greatest housing affordability deterioration among major markets in the Demographia Annual International Housing Affordability Survey, with its Median Multiple deteriorating from 5.3 to 12.6, equivalent to 7.3 years of pre-tax median household income.”
It adds that the recent implementation of the foreign buyers’ tax “appears to have cooled the hyper-inflation as least temporarily.”
Overall, the survey found 10 affordable major housing markets, all in the United States, and 28 severely unaffordable major housing markets, including in Australia (5), New Zealand (1) and China (1).
Thirteen of 54 major markets in the U.S. are severely unaffordable, as are six of 21 major markets in the United Kingdom and two out of six in Canada.
The most affordable major housing markets are in the U.S., with a moderately unaffordable median multiple of 3.8, followed by Japan (4.2), Canada and the United Kingdom (4.3). Singapore and Ireland both have median multiples of 4.8.
The major housing markets of Australia (6.6), New Zealand (8.8) and China (19.4) are severely unaffordable.
There are 10 affordable major housing markets, all in the United States based on the median multiple:
- Rochester (2.5)
- Cincinnati and Cleveland (2.7)
- Oklahoma City, Pittsburgh and Buffalo (2.8)
- St. Louis and Detroit (2.9)
- Indianapolis and Grand Rapids (3.0).
There are 26 severely unaffordable major housing markets in 2017 according to that measure)
- Hong Kong (19.4, up from 18.1 last year)
- Sydney (12.9)
- Vancouver (12.6)
- San Jose (10.3)
- Melbourne (9.9)
The least affordable 10 also include:
- Los Angeles (9.4)
- Honolulu (9.2)
- San Francisco (9.1)
- Auckland (8.8)
- London (8.5).