An annual survey has again ranked Metro Vancover as the second least affordable place to buy a home out of more than 300 cities.
The Demographia study calculates a “median multiple” to measure housing affordability for each metro area by dividing the median home price by the median household income.
Metro Vancouver’s multiple is 9.5 – meaning the typical home costs nearly 10 times the typical household’s income. Demographia considers anything over 5.0 to be “severely unaffordable.”
Only Hong Kong is worse, at 13.5, while cities that rated slightly better included Sydney, Australia (8.3), San Francisco and London (both at 7.8). Canadian cities overall averaged 4.5. Most of the cities compared are in the U.S., U.K., Australia and Canada.
The Demographia study said Vancouver’s “grossly overvalued market” moderated somewhat from last year, resulting in a drop in the median multiple from 10.6 in 2012.
“In addition to Vancouver, the three most unaffordable (Canadian) metropolitan markets were in British Columbia, including Victoria, Kelowna and Abbotsford,” it said.
The study blames urban containment policies – such as Metro Vancouver’s regional growth strategy and B.C.’s Agricultural Land Reserve – for driving prices too high.
Real estate pundits point out it’s difficult to compare Metro Vancouver, with a land base constrained by ocean, mountains and the U.S. border, with many other cities that can sprawl in all directions.