Affordability is a major issue in every major Canadian housing market, new report claims.
“There are no affordable major markets, one major market is rated as moderately unaffordable, three are rated seriously unaffordable and two are rated severely unaffordable,” Demographia said in its 2017 edition of the International Housing Affordability Survey.
The survey compares housing affordability in 406 metropolitan housing markets in Canada, the United States, the United Kingdom, Ireland, China, Japan, New Zealand, Singapore, Australia.
To determine affordability, the survey assigns an affordability value based on house prices compared to median household incomes. A “median multiple” value is established; a value under 3.0 is considered affordable.
Vancouver was deemed the country’s least affordable market with a value of 11.8. It ranks third overall, worldwide.
“Toronto also has a severely unaffordable housing market, with the Median Multiple deteriorating to 7.7 in 2016, adding an equivalent of a year’s income to last year’s 6.7.
Consistent with other high cost housing markets, Toronto has had substantial domestic outmigration,” Demographia said. “Montréal has seriously unaffordable housing (4.8), and has also experienced substantial net domestic out-migration.
“Calgary (4.6) and Edmonton (4.1) are also seriously unaffordable. Canada’s most affordable major market is Ottawa-Gatineau (3.9), which is rated as moderately unaffordable.”
The controversial study joins a growing chorus of voices lamenting housing affordability in Canada.
CMHC issued a “red warning” for Canada’s housing market in its latest Housing Market Assessment, released in the fall.
“We now see strong evidence of problematic conditions overall nationally,” CMHC chief economist Bob Dugan said at the time. “This is fuelled by overvaluation — meaning house prices remain higher than the level of personal disposable income, population growth and other fundamentals would support.”
Toronto, Vancouver, Hamilton, and Quebec City were all given a red warning; Edmonton, Calgary, Saskatoon, Regina, and Montreal, meanwhile, were assigned a yellow warning for “moderate evidence of overvaluation.”