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WINNIPEG – TheNewswire - June 3, 2024 - The 2024 edition of the Demographia International Housing Affordability Report reveals alarming trends in Canadian housing markets, highlighting a significant decline in affordability. The report, which examines 94 major markets worldwide, indicates that Canadian cities are becoming increasingly unaffordable, with a median multiple of 5.6, up from 4.4 in 2019.
The affordability index calculates the ease or difficulty with which people can buy homes in different places. It uses a measure called the Median Multiple, which contrasts the average house price to the average household income. The lower the number of income years it takes for a household with an average income to pay for an average-priced home, the more affordable the area is. The index gives different ratings for different ranges of the Median Multiple. This helps compare how easy it is to buy a home in different cities.
The 2024 report, released in co-operation with the Frontier Centre for Public Policy, is based on data from the third quarter of the year and reveals a growing disparity in housing affordability.
Key Findings for Canada:
Widespread Unaffordability: Four out of six major Canadian markets are now rated as severely unaffordable. The decline in housing affordability has been particularly stark since the mid-2000s, driven by significant increases in housing costs in Vancouver and Toronto.
Vancouver: Vancouver remains the least affordable market in Canada and ranks 92nd out of 94 globally, with a median multiple of 12.3. This makes Vancouver more unaffordable than almost any other market, except Hong Kong and Sydney. For the past 16 years, Vancouver has consistently ranked among the top three least affordable major markets.
Smaller Markets in British Columbia: Markets such as Chilliwack, the Fraser Valley, Kelowna, and those on Vancouver Island have seen dramatic declines in affordability. From 2015 to 2023, housing affordability in these smaller markets worsened by the equivalent of 2.5 years of median household income, surpassing the deterioration seen in Vancouver itself.
Toronto: Toronto is the second least affordable market in Canada, ranking 84th globally, with a median multiple of 9.3. Like Vancouver, Toronto has seen severely unaffordable housing conditions spread to nearby markets such as Kitchener-Cambridge-Waterloo, Brantford, London, and Guelph. These markets have experienced a worsening of affordability by the equivalent of 3.3 years of median household income from 2015 to 2023.
Other Canadian Markets: Montreal and Ottawa-Gatineau are also severely unaffordable, with median multiples of 5.8 and 5.3, respectively. Edmonton, the most affordable major market in Canada, is still moderately unaffordable with a median multiple of 3.6, while Calgary is seriously unaffordable at 4.6.
Growing Disparities: The gap between the most affordable and least affordable markets in Canada has widened significantly, rising from a difference of 1.5 median multiple points in 1971 to 8.7 points in 2023. This increase is equivalent to 7.2 years of median household income.
Net-Domestic Migration: The report highlights a strong link between housing affordability and net domestic migration. From 2018 to 2022, Canada’s six major metropolitan areas lost 444,000 domestic migrants to other regions of the country. These major metropolitan areas have a median multiple of 7.9, and the migration trend underscores a shift towards smaller markets and rural areas, driven by the search for more affordable housing.
International Migration: While international migration to Canada has increased, the report argues that the main driver of escalating house prices is not immigration but restrictive land use policies. These policies have limited the supply of affordable housing, exacerbating the housing affordability crisis.
For more information:
Contact:
Wendell Cox
Demographia
demographia@gmail.com
Marco Navarro-Genie
Director of Research
Frontier Centre for Public Policy
mng@fcpp.org
1 (403) 818-7148
About Demographia
Demographia is dedicated to providing reliable data and analysis on housing affordability across the globe. Through its annual reports, Demographia aims to highlight critical issues affecting housing markets and inform policy decisions.
About the Frontier Centre for Public Policy
The Frontier Centre for Public Policy (FCPP) is an independent Canadian public policy think tank based in western Canada whose mission is to explore options for the future by undertaking research and education that supports economic growth and opportunity.
Our research aims to analyze current affairs and public policies and develop effective and meaningful ideas for good governance and reform. We provide a platform for public debate and engage with the public through our numerous publications and events.
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