An annual international survey rates Vancouver as the third least affordable housing market on the planet, and Victoria as the least affordable smaller housing market in Canada.
Victoria is deemed “severely unaffordable” in the 2017 Demographia International Housing Affordability Survey, which rates 406 cities in nine countries, including 35 in Canada according to housing costs in relation to one year of median household income. The statistics were compiled using the third quarter of 2016 and do not take into account differences in house sizes.
For example, Vancouver’s rating is 11.8, meaning the median house price of $830,100 is 11.8 times the median household income of $70,500. Only Hong Kong and Sydney, Australia are ranked higher at 18.1 and 12.2 respectively.
Victoria was ranked 381 out of 406 cities, reflecting its rating of 8.1 times the median income of $67,300 required to buy a house with a median cost of $542,400. “The Vancouver ‘ripple effect’ is evident in severely unaffordable Victoria and the Fraser Valley,” the report said. For the fifth year in a row, Moncton, N.B. was the most affordable city in Canada, based on a median house price of $134,900 and median household income of $65,200 — thus a rating of 2.1.
Demographia defines housing markets as affordable when median prices are less than three times the median household income. Second most affordable in Canada is Charlottetown, followed by Moose Jaw, Sask.; Saguenay, Que.; Saint John, N.B.; Sudbury, Ont.; Thunder Bay, Ont.; Trois-Rivières, Que.; and Windsor, Ont.
Napa, California, was the closest-ranked city to Victoria, with a median income of $77,100 and a median house price of $650,000. U.S. median incomes have only recently returned to 1998 levels.
The report said that rapidly escalating house prices are associated with wider adoption of urban containment policies. Victoria and Vancouver are hemmed in by water, other municipalities or mountains.
In contrast, Saanich established an urban containment boundary in 1964. To protect some parts of the municipality from development, it limited availability of sanitary sewers and required minimum five-acre parcel sizes in some areas, West Coast Environmental Law notes on its website.
Calgary’s rating of 4.6 was highest in Alberta, based on a median house price of $427,000 and household income of $93,100. Prices in Toronto soared by $79,700 in one year, resulting in a median of $615,800 for a rating of 7.7.
Other cities ranked least affordable are Auckland, New Zealand, where prices are 10 times the median income, followed by San Jose, California; Melbourne, Australia; Honolulu; Los Angeles; San Francisco; and the southwestern England region of Bournemouth and Dorset.