Vancouver Real estate unaffordable on a world scale
Well its official, not that it is really a surprise if you happen to already live in Vancouver, you probably already know that Vancouver is one of the most expensive places to live in Canada. But now the Financial post is reporting that we are of of the most unaffordable housing markets in the World. Please read below to find out how they come up with the "Affordability" calculation. I personally am surprised about our "world status". Having sold Vancouver Condos for many years, I know how out of reach they can be. I often had to break the news, that a quarter of a million dollars will get you nothing on the west side or downtown Vancouver, and for that matter it is hard to find something anywhere in Vancouver in a good building for a quarter of a million dollars...Please read the attached article and if you have any comments or questions let me know.
OTTAWA -- Vancouver has become one of the most unaffordable housing markets in the world, with Toronto and Montreal not far behind, according to a survey released Monday.
Vancouver not only has the least affordable housing of 28 markets measured in Canada, but of 272 metropolitan markets ranked in Ireland, the U.K., New Zealand, Australia, the U.S. and Canada, according to statistics compiled by the Winnipeg-based Frontier Centre for Public Policy.
As Canada’s resale housing market boomed and prices rose in 2009, affordability fell, sending the national average to a reading of 3.7 from 3.5 the year before, the group said.
That would place Canada’s overall housing market in the “moderately unaffordable” category -- from 3.1 to 4.00.
The numbers are calculated by dividing the median (or middle) residential house sale price from the third quarter by median annual gross household income. In Vancouver, for example, a median home price of $540,900 was divided by median household income of $58,200 to create a multiple of 9.3. The group describes as “severely unaffordable” any reading of 5.1 and over.
Not only that, it is “unprecedented in modern history,” the group said.
Toronto moved from a reading of 4.8 to 5.2, moving it into the severely unaffordable category, while Montreal moved from a reading of 4.6 to 4.9.
“Montreal is approaching severely unaffordable for the first time. It appears Montreal has caught up to its urban growth limit and this has now become a real constraint on land supply,” the group said.
Victoria was second only to Vancouver, with its reading rising from 7.4 to 7.0, while Ottawa’ hot housing market remained within the realm of the moderately unaffordable, at least as measured as part of the Ottawa-Gatineau metropolitan area, with a reading of 3.8, up from 3.4 the year before.
Affordability improved slightly in Calgary and Edmonton, the site of some of Canada’s hottest housing markets in recent years, falling to 4.6 from 4.8 in Calgary, and to 4.1 from 4.2 in Edmonton. They still, however, remained “seriously unaffordable” -- 4.1 to 5.0.
Canwest News Service
Metropolitan Market Median Multiple (2009 / 2008 / change):
Calgary 4.6/ 4.8/ -0.2
Edmonton 4.1/ 4.2/ -0.1
Hamilton 4.2/ 4/ 0.2
Kelowna 5.9/ 6.8/ -0.9
Montreal 4.9/ 4.6/ 0.3
Ottawa-Gatineau 3.8/ 3.4/ 0.4
Quebec 3.6/ 3.4/ 0.2
Regina 3.5/ 3.5/ 0
Saint John, N.B. 2.8/ 2.7/ 0.1
Saskatoon 4.4/ 4.6/ -0.2
St. John’s 3.1/ 2.8/ 0.3
Toronto 5.2/ 4.8/ 0.4
Vancouver 9.3/ 8.4/ 0.9
Victoria 7.9/ 7.4/ 0.5
Windsor 2.2/ 2.3/ -0.1
Winnipeg 3.3/ 3/ 0.3
National Median Multiple 3.7 / 3.5 / 0.2