2 Canadian cities rated high on the list of the most expensive places in the world to buy a home
As Canadians continue to struggle with the extremely high cost of buying a home in some of the country’s major urban centres, a new global report is underscoring just how expensive some of those markets are.
A study by Demographia, which examines international housing affordability, has deemed Vancouver and Toronto as “impossibly unaffordable.”
David MacDonald, a senior economist with the Canadian Centre for Policy Alternatives, says the findings of the study aren’t surprising.
“This is a long time coming. We haven’t been building enough housing, we certainly haven’t had enough government investment in affordable housing for decades, and the chickens are coming home to roost,” he said.
he report analyzed middle-income affordability across 94 major markets in eight countries, including Canada, China, Ireland, Australia, New Zealand, Singapore, the United States and the United Kingdom. Each city is ranked based on its median multiple score which is determined by dividing the average house price in a city by its gross median household income.
A score under three is considered “affordable”, a score between 3.1 to four is considered “moderately unaffordable”, a score between 4.1 to five is considered “seriously unaffordable,” a score between 5.1 to 8.9 is considered “severely unaffordable” and this year, a new category of “impossibly unaffordable” was added for cities scoring nine or higher.
Toronto scored 9.3 and ranks 11th on the housing unaffordability list and Vancouver scored 12.3 and ranks third on the list.
“Buying a property right now. I feel it’s almost out of the question for me and my partner. We just can’t afford to do it,” said Aman Fiseha, a Vancouver resident.
A housing shortage is driving up the price of a home in Canada.
The Canada Mortgage and Housing Corporation says an extra 3.5 million homes need to be built to restore affordability by 2030.
In April, the Federal government announced billions in spending.
However, for people like Fiseha, it might be too late.
“We have considered potentially looking at opportunities in the United States,” he said.
The report highlights housing costs outpacing income growth as the main cause of the crisis in the countries studied.
In Canada, Edmonton is the cheapest market to buy a home and labelled as “moderately unaffordable,” with a score of 3.6.
Calgary is listed as “seriously unaffordable” with a score of 4.6 and Ottawa and Montreal are considered “severely unaffordable,” with scores of 5.3 and 5.8 respectively.
Tom Storey, a Sales Representative with Royal Lepage Signature Realty, says people need to be a bit more creative to get into the housing market.
“Some people that are under rent control and have really good living conditions, what they’re doing is actually buying an investment property as their first properties that they can get into the market. They’re teaming up with their friends and family to co-buy properties and actually get it,” he said.
Nearly 90 per cent of the cities in the study did not fall into the highest rank of “impossibly unaffordable,” but none of the 94 cities scored below three, the cut off to be deemed “affordable.”
This article was first reported by CTV News
