The cost of buying a home in Canada contrasts significantly from coast to coast, with some of the world’s least affordable cities on the West Coast, while some markets in Eastern Canada remain relatively inexpensive, according to a survey of cities worldwide released yesterday.
According to the fifth annual Demographia International Housing Affordability Survey, Vancouver sits fourth on the list of least affordable cities in the world, with a median house price at 8.4 times the median income.
That means it costs 8.4 years’ average income to purchase a house.
The average median in Canada was 3.5.
Ottawa-Gatineau, while rated “moderately unaffordable” is considered the most affordable major market in Canada with median multiple of 3.4.
The New York-based Demographia report, released in Canada by the Frontier Centre for Public Policy, looked at third-quarter 2008 data in 265 metropolitan markets in countries including Australia, Canada, Britain and the U.S. and defines affordable home prices as three times a city’s median income or less.
Vancouver fell behind Gold Coast in Australia, at No. 3, Honolulu, Hawaii, at No. 2, and Australia’s Sunshine Coast, which is in top spot on the least affordable list.
All of Canada’s “severely unaffordable” cities are in B.C., including Victoria, at seventh, Kelowna, at 19th and Abbotsford, at 25th.
The survey uses existing house sales data to rate housing affordability.
There are 87 “affordable” markets, 74 “moderately unaffordable” markets, 49 “seriously unaffordable” markets and 64 are “severely unaffordable.”
All of the 87 “affordable markets” are located in Canada and the U.S., while most markets in Australia, Ireland, New Zealand and Britain are rated as “severely unaffordable.”
There are 77 affordable markets in the U.S. with the remaining 10 affordable markets in Canada.
While B.C. cities ranked poorly, several cities located on the other side of the country made the most affordable list.
Cape Breton Island in Nova Scotia is Canada’s most affordable market area and sits at No. 5 on the list behind four U.S. markets.
Winnipeg was the largest city to be included on the affordable list with a 3.0 median, although it is near the bottom of the list.