Toronto and Vancouver are among the top five most unaffordable housing markets across 92 metropolitan areas in eight countries, a new report says.
The report (pdf), released on Monday by think tanks Urban Reform Institute and Frontier Center for Public Policy, seeks to rate the affordability of houses using the median multiple, a “measurement of income in relation to housing prices, or 92 major markets (metropolitan areas) in eight nations for the third quarter of 2020.”
The higher the rating score, the more unaffordable it is.
Hong Kong tops the chart as the least affordable housing market with a rating of 20.7. Vancouver was second with a score of 13.0, worsening by 1.1 compared to last year, according to a report (pdf).
Sydney takes the third position with a 11.8 rating, followed by Auckland at 10.0, and Toronto closely behind at 9.9. Similar to Vancouver, Toronto’s unaffordable rating increase by 1.3 compared to 2019.
Montreal (5.6) and Ottawa-Gatineau (5.2) join the category of “Severely Unaffordable” along with Vancouver and Toronto, but they are not among the top 20.
Calgary fares slightly better at 4.1 with “Seriously Unaffordable” and Edmonton is considered “Moderately Unaffordable” at 3.8.
The report noted that “housing affordability has deteriorated materially in recent decades,” but the situation has been worsened due to COVID-19, the disease the CCP (Chinese Communist Party) virus causes and that triggered a worldwide pandemic.
“In this year of the global pandemic and lockdowns, it is not surprising that housing affordability—given the large influx of new buyers, particularly in suburban and outlying areas—has continued to deteriorate,” the authors wrote.
“As a result many low-income and middle-income households who already have suffered the worst consequences from housing inflation will see their standards of living further decline.”
The authors said that the increase in remote working amid the pandemic has been “accelerating the movement” of people moving to more affordable places, which likely will flatten the prices in the areas with the highest housing prices.