Each year, the Demographia International Housing Affordability Survey measures housing affordability across 325 housing markets worldwide, including 35 Canadian Housing Markets.
The Survey takes the median house sale price in a municipality and divides it by the median household income to give the Median Multiple, a measure of housing affordability regarded as the “Gold standard” in housing affordability and endorsed by the United Nations and the World Bank.
The authors of the Survey point out that for most of the post war history of Western nations such as Canada, housing has been afforded at around three times income. Since the late 1980’s this affordability threshold has been crashed through in many markets with housing in Vancouver, measured as the second least affordable market in the English speaking world, now costing 10.6 times household income.
There is growing acceptance that the major cause of unaffordable housing is the approach of urban planners towards land use. Prescriptive plans that set out how land can be used in great detail over long periods of time tend to restrict the amount of land available to meet the demand for housing, leading to shortages and price rises. Responsive policies where municipalities aim to build infrastructure in response to growth rather than the other way around tend to maintain affordability even during times of rapid growth.
Source: 8th Annual Demographia International Housing Affordability Survey