Even with house prices down in a soft economy, Kelowna's housing is still considered "severely unaffordable." The Frontier Centre for Public Policy's eight annual Demographia Housing Affordability Survey puts the city's multiple ratio at 6.6, the fourth most unaffordable in the country behind Vancouver, Abbotsford and Victoria.
What that means is to buy a median-priced home in Kelowna at $385,100 requires 6.6 times the median annual household income of $58,100.
Multiple ratios of 5.1 and over are considered "severely unaffordable" and six Canadian cities fall into that category.
"That's relevant and it's irrelevant all at the same time," said Bert Chapman, broker at Premier Canadian Properties in Kelowna.
"It's relevant to young people that are trying to get into their first home and are finding it expensive and hard to come up with the down payment. But it's also irrelevant because Kelowna has one of the highest rates of home ownership, so people are obviously buying homes." Chapman admits Kelowna is a special real estate market.
People that have owned a home in Kelowna for years and seen its value skyrocket don't have a problem selling and using the equity in the home to buy a bigger and better place.
Also a lot of people sell in Vancouver – where it's even more expensive – then buy a comparable place here for less.
People who make big money in Alberta also buy in Kelowna.
David Seymour, the senior policy analyst with the Frontier Centre, echoed those sentiments.
"Kelowna is a somewhat of a distorted market," he said.
"Move – up buyers aren't having a problem. The same goes for most retirees and move-in buyers from Vancouver and Alberta. But that still leaves a big chunk of the population that finds Kelowna severely unaffordable – young people trying to buy their first home, single parents and lower income families." The median house price house is determined by averaging the sale price of all kinds of homes – condominiums, townhouses and single-family homes – in the third quarter of 2011.
Vancouver is the most unaffordable in Canada with a multiple ratio of 10.6, meaning it takes 10.6 times the median household income of $63,800 to buy a median-priced house of $678,500.
The most affordable city in the country is Windsor, Ont., with a multiple ratio of 2.2, meaning it takes 2.2 times the median household income of $67,900 to buy a median priced house of $149,000.
High house prices are a double-edged sword.
On one hand, those that already own love to see prices go up because that means they're building equity in their home.
On the other hand, high values price some segments right out of the market – young people, single parents, retirees on a fixed income and low-income families, for example.
To be considered "seriously unaffordable," the multiple ratio has to come in between 4.1 and five. Only one Canadian city falls into that classification – Hamilton, Ont.
"Moderately unaffordable" is 3.1 to 4 and 19 of 35 Canadian cities surveyed fall into that category.
A multiple ratio of three and under is considered affordable. Nine cities fall into that category, from Windsor to Saguenay, Que.
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Housing affordability ratios as determined by the Frontier Centre for Public Policy's eight annual Demographia Housing Affordability Survey (5.1 and over is considered severely unaffordable, 4.1 to five seriously unaffordable, 3.1 to four moderately unaffordable, and three and under affordable.
– Vancouver: 10.6
– Abbotsford: seven
– Victoria: 6.8
– Kelowna: 6.6
– Toronto: 5.5
– Montreal: 5.1
– Hamilton, Ont.: 4.2
– Saskatoon: four
– Sherbrooke, Que.: four
– Calgary: 3.9
– Peterborough, Ont.: 3.8
– Quebec City: 3.8
– Kitchener, Ont.: 3.7
– Ottawa: 3.7
– Kingston, Ont.: 3.6
– Barrie, Ont.: 3.5
– Edmonton: 3.5
– Guelph, Ont.: 3.5
– Halifax: 3.5
– St. John's, N.L.: 3.5
– Winnipeg: 3.4
– Regina: 3.3
– St. Catherines/Niagara Falls, Ont.: 3.3
– Sudbury, Ont.: 3.3
– Brantford, Ont.: 3.2
– London, Ont.: 3.2
– Saguenay, Que.: three
– Trois- Rivieres, Que.: three
– Charlottetown: 2.9
– Yellowknife: 2.9
– Saint John, N.B.: 2.6
– Fredericton, N.B.: 2.4
– Windsor, Ont.: 2.2