Hong Kong, Vancouver and Sydney, Australia — those are the three most unaffordable housing markets in the world according to the International Housing Affordability Survey by Demographia, a US think tank.
The annual ranking — which studies real estate markets in Canada, the United States, Australia, China, Ireland, Japan, New Zealand, Singapore and the United Kingdom — uses the “median multiple,” which compares a city’s median income to its median home price. A median multiple rating of 5.1 and over is classified as “severely unaffordable” and a reading below three is considered “affordable.” With that in mind, here are the 10 most unaffordable markets studied.
Vancouver’s 10.6 ranking is the highest it’s been in the survey’s 11-year history. And although Vancouver was the only Canadian city that made it in the top 10, housing markets in Victoria, Kelowna, the BC Fraser Valley and Toronto were also ranked as unaffordable. In fact, Toronto’s median multiple number was 6.5, a 65 per cent increase in unaffordability since the survey began in 2004.
As a group, Canada’s six largest cities were classified as a ” seriously unaffordable,” with a median multiple of 4.3.
In the US, Demographia says housing affordability worsened slightly in major markets from 2013 to 2014. Here’s a look at the affordability ranking of the country’s 10 largest markets.
Delve further into the study by downloading the full report here (PDF).