By Charles Hamilton, The Star Phoenix January 23, 2013 - Incomes aren't keeping up with the increasing cost of housing in Saskatoon, making Saskatchewan's largest city as unaffordable as Calgary, an international study says.
"You are seriously unaffordable," Wendell Cox, the Illinois-based co-author of the Demographia international housing affordability study, said Tuesday.
Cox and his colleagues calculate a measure of affordability by dividing the median house price in a community by the median household income, coming up with a number called a "median multiple." Data is available for Canada, the United States, Australia, New Zealand, Hong Kong, the United Kingdom and Ireland.
During the past number of years, Saskatoon has consistently ranked as one of the least affordable cities in Canada.
Last year it had a score of 4.0. This year, it is less afford-able, with a score of 4.3.
"That means the median house price is 4.3 times the median household income. It should be three or less," Cox said.
Saskatoon matched Calgary with a rank of 27th out of 35 centres in Canada, with 35 being the least affordable.
Vancouver, ranked 35th, was behind only Hong Kong among the least affordable major cities internationally.
Despite the study's findings, one local real estate agent said 2012 saw the second-highest total unit sales on record.
"That's got to say something about people's ability to buy here," Norm Fisher said.
"It's certainly less affordable than it was in 2006, but things are not changing at the same pace that they were before. I think incomes have caught up since then."
Fisher said Saskatoon is getting more expensive more quickly than most Canadian cities, but it is a trend happening across Western Canada.
"I think clearly we are out of sync with the average in Canada, but that is probably a reflection of the economic activity in this area," Fisher said.
Cox said all cities that rank poorly in affordability have one thing in common: a policy of building up the core of the city as opposed to building out. He said the focus on density in the core areas instead of building on the edges means the supply of new housing can't keep up with the demand.
"The very idea of forcing all that new growth into the existing urban form is, I think, going to blow up in your face," Cox said.
"It's an incredible shame when you consider that you are not surrounded by water, you don't have a mountain within 800 kilometres and there is no reason to force the people of Saskatoon to pay more for housing."
Regina's measure on the Demographia scale rose to 3.8 in this year's report from 3.3, ranking 21st in Canada. Saskatoon and Regina were first part of the survey five years ago, with numbers from the third quarter of 2006. The median measures then were 2.6 and 2.0, respectively.