It’s common knowledge that homes in Vancouver are more expensive than anywhere else in Canada. It’s also cost prohibitive on a much larger scale. A new study reveals the city is the second least-affordable place in the world.
Demographia, an urban planning policy company, ranked the metropolitan markets in eight countries—Canada, the United States, China (Hong Kong only), Singapore, Australia, New Zealand, the U.K. and Ireland. The least affordable city continues to be Hong Kong, which has been the “reigning champ” for nearly 10 years. Vancouver was ranked in third place for three years (after Hong Kong and Sydney, Australia) until 2019. Number 11 on the list is Toronto.
“Vancouver has experienced significant housing affordability deterioration among major markets, with its Median Multiple deteriorating from 5.3 to 12.6 [since the first survey in 2004], equivalent to 7.3 years of pre-tax median household income,” according to the report.
Lululemon founder Chip Wilson owns the most expensive home in Vancouver at $73.1 million. The housing market slowdown decreased its value by $5.7 million last year. One in every four homes in the city is worth $3 million or more, reports Vice.
Government policies aimed at foreign buyers, stricter rules on mortgages, and higher interest rates have slowed the housing market, but Demographia points out that these changes have affected the ultra-rich much more than the middle range.
Demographia measures housing affordability by comparing median house price and median income. There has been some criticism about Demographia’s study because it only examines a select number of countries and doesn’t take into account other variables. The 2019 study, for example, only looks at two European markets and doesn’t factor in price housing markets in China other than Hong Kong.
A study by National Bank of Canada has found that one mortgage payment for a median-priced single-family home in Vancouver is 101 percent of the region’s median household income, reports the Vancouver Courier. This is 6.4 percentage points higher than last year—more than it’s ever been. Affordability for condos is also at its worst-ever level.
While home ownership has historically been less expensive then renting, it’s since become pricier.