Global News, January 26, 2016 - Home hunters may already have heard this one: Vancouver and Toronto are expensive places to buy a house. Or townhouse. Or condo.
That fact was underscored — yet again — on Tuesday when annual data was released by Demographia, a market researcher, that showed exactly how unaffordable residential property in those centres has become, at least compared to household incomes in those markets.
The price of an average home in the Toronto area is now 6.7 times the annual median household income. In Vancouver, that ratio jumps to an eye-popping 10.8 — making the city one of the most expensive housing markets in the world.
Four out of the country’s five least affordable cities in 2015 were in British Columbia, the U.S.-based researcher said, similar to 2014. Like other housing market experts, Demographia says a home with a price tag that’s more than three times the median income of the area has tipped into being unaffordable to potential buyers.
As late as 2000, home prices in most Canadian markets were defined as affordable. But like other nations such as Australia, that’s changed dramatically in recent years.
The average multiple for a home in Canada is now 3.9 times median income. For major urban markets it jumps to 4.2 times – making them “seriously unaffordable” for median income households.
There is some relief though for those unwilling to borrow more to buy a place in expensive cities. Several markets have average multiples that are still safely within the affordable range, according to Demographia.
Moncton, Saint John, Fredericton, Saguenay, Charlottetown, Trois-Rivieres, Windsor, Sudbury, Thunder Bay and Kingston are the 10 most affordable cities in the country, by multiple relative to local incomes.