Two Canadian cities made it to the global list of most expensive places to buy a home!
The 2024 Demographia International Housing Affordability Report, released on July 3, has identified two Canadian cities, Vancouver and Toronto, as two of the top 12 most expensive housing markets in the English-speaking world. Vancouver was ranked as the third least affordable city globally, while Toronto took 11th place.
The report evaluated middle-income affordability across 94 major housing markets in countries like Canada, Australia, China, Ireland, New Zealand, Singapore, the United States, and the United Kingdom. Each city’s house-price-to-income ratio was calculated by dividing the median house price by the gross average household income, with the rank being:
- A score below 3 is “affordable”;
- A score between 3.1 and 4.0 is “moderately unaffordable”;
- A score between 4.1 and 5.0 is “seriously unaffordable”;
- A score between 5.1 and 8.9 is “severely unaffordable”;
- Cities scoring 9 or higher are “impossibly unaffordable”.
In the final quarter of 2023, Hong Kong was the least affordable market with a score of 16.7, followed by Sydney at 13.3, and Vancouver at 12.3. Other cities in the top rankings included San Jose, Los Angeles, Honolulu, Melbourne, San Francisco, Adelaide, San Diego, and Toronto – that was ranked at 9.3.
Previous Canadian Housing Market Scenario
For the past 16 years, Vancouver has consistently been on Demographia’s unaffordable housing list, taking the first, second and third position. The study author pointed out that this issue has also spread to smaller B.C. markets like Chilliwack, the Fraser Valley, Kelowna, and markets on Vancouver Island.
“From 2015 to 2023, housing affordability worsened by the equivalent of 2.5 years of median household income in smaller markets outside Vancouver, an even greater loss than the 1.2 years in the Vancouver market itself”, the report said.
Toronto, with a median multiple of 9.3, has also seen a rise in housing costs since the pre-pandemic level of 8.6. The affordability crisis has extended to smaller markets in Ontario as well, such as Kitchener-Cambridge-Waterloo, Brantford, London, and Guelph, due to residents of metro Toronto seeking lower costs of living.
“From 2015 to 2023, housing affordability has worsened by the equivalent of 3.3 years of median household income in smaller markets outside Toronto, a greater loss than the 2.6 years in the Toronto market itself”, the report noted.
Other Canadian cities, while not as unaffordable as Vancouver or Toronto, still face high housing costs. Montreal scored 5.8 and Ottawa-Gatineau 5.3, both “severely unaffordable.” Calgary, with a score of 4.6, is “seriously unaffordable,” and Edmonton, with a score of 3.6, is “moderately unaffordable.” None of the 94 cities in the study scored below three, which is considered “affordable”.