A new study released by the Frontier Centre for Public Policy that covers 325 markets, incuding Canada, Australia, Hong Kong, Ireland, New Zealand, the United Kingdom and the United States, indicates that affordability has become an issue, in particular in Canada.
In order to fall under the “affordable” category, the ratio of price to income cannot be more than three to one; tellingly, only half of all the 35 Canadian markets surveyed fell within those guidelines. They call this calculation the “Median Multiple.”
In general terms, across the country, Canadian home prices were at 4.6 times the average annual salary of just less than $43,000. And when you do the math- that is just plain out of reach for many.
According to the survey, historically, median multiples have been similar in markets in Canada, Ireland, New Zealand, the United Kingdom and the United States, with “median house prices having generally been 3.0 or less times median household incomes in the principal affordability indexes.”
However, there have been deviations from this trend over the last decade- with home prices rising swiftly in Australia, Ireland, New Zealand, and the United Kingdom and in some markets of Canada and the United States.
Contuining on that trend, the most unaffordable markets were found in the United States and Canada. The United Kingdom, Australia and New Zealand.
According to the survey, for all markets, “Among all 325 markets surveyed, there were 115 affordable markets, 106 in the United States and 9 in Canada. There were 94 moderately unaffordable markets, 74 in the United States, 17 in Canada and 3 in Ireland.
There were 42 seriously unaffordable markets and 74 severely unaffordable markets. Australia had 27 severely unaffordable markets, followed by the United Kingdom with 21 and the United States with 15. Canada had 6 severely unaffordable markets, while
New Zealand had 4. China's one included market, Hong Kong, was also severely unaffordable.”
Breaking it down for Canadian cities, there was great variance from region to region. Affordable cities include Windsor, where average home prices were $145,000, which is only 2.1 times the average median income of $68,900.
On the other end of the spectrum, is Vancouver, where the average home costs $602,000- which works out to 9.5 times the $63,100 median income.
According to the survey, historically, median multiples have been similar in markets in Canada, Ireland, New Zealand, the United Kingdom and the United States, with “median house prices having generally been 3.0 or less times median household incomes in the principal affordability indexes.”
However, there have been deviations from this trend over the last decade- with home prices rising swiftly in Australia, Ireland, New Zealand, and the United Kingdom and in some markets of Canada and the United States.
Contuining on that trend, the most unaffordable markets were found in the United States and Canada. The United Kingdom, Australia and New Zealand.
According to the survey, for all markets, “Among all 325 markets surveyed, there were 115 affordable markets, 106 in the United States and 9 in Canada. There were 94 moderately unaffordable markets, 74 in the United States, 17 in Canada and 3 in Ireland.
There were 42 seriously unaffordable markets and 74 severely unaffordable markets. Australia had 27 severely unaffordable markets, followed by the United Kingdom with 21 and the United States with 15. Canada had 6 severely unaffordable markets, while
New Zealand had 4. China's one included market, Hong Kong, was also severely unaffordable.”
Breaking it down for Canadian cities, there was great variance from region to region. Affordable cities include Windsor, where average home prices were $145,000, which is only 2.1 times the average median income of $68,900.
On the other end of the spectrum, is Vancouver, where the average home costs $602,000- which works out to 9.5 times the $63,100 median income.
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