Middle-income affordability was analyzed across 94 markets in eight countries, including Canada, Australia, China, New Zealand, the United States, Singapore, Ireland and the United Kingdom, in Demographia's International Housing Affordability report.
To rank each market, Demographia used a median multiple, a price-to-income ratio that divides the median house price by the median household income.
Markets with a median multiple of 3 and under were considered affordable, while markets with a score of 3.1 to 4 were considered "moderately unaffordable," and those with a score of 4.1 to 5 were deemed "seriously unaffordable."
At the tail end of the rating, markets with a median multiple of 5.1 to 8.9 were considered "severely unaffordable," and those with scores of 9 or over were deemed "impossibly unaffordable."
According to the study, Toronto and Vancouver have been deemed "impossibly unaffordable" housing markets in Canada.
Vancouver scored a median multiple of 12.3, making it the third most unaffordable market of the 94 on the list and the least affordable in Canada.
"Vancouver has been the first, second or third least affordable major market for each of the last 16 years," says the report, which notes that Vancouver is only out-ranked in unaffordability this year by Hong Kong and Sydney, Australia.
"Troublingly, impossibly unaffordable housing in the Vancouver market has also has spread to smaller BC markets in British Columbia, such as Chilliwack, the Fraser Valley, Kelowna, and markets on Vancouver Island," it says.
The city of Toronto. Rodrigolab | Dreamstime
Toronto, on the other hand, received a median multiple of 9.3, placing it in the 11th spot on the list and making it the 84th most expensive market.
"As in Vancouver, severely unaffordable housing has spread to smaller, less unaffordable markets in Ontario, such as Kitchener-Cambridge-Waterloo, Brantford, London, and Guelph, as residents of metro Toronto seek lower costs of living outside the Toronto market," says the report.
According to the Canadian Real Estate Association, the benchmark price of a home in the Greater Toronto Area is $1.1 million as of May 2024.
The report highlights housing costs outpacing income growth as the main cause of unaffordability in the nations included in the study.
On the less unaffordable side, Edmonton was found to be the most affordable housing market in Canada, with a "moderately unaffordable" median multiple of 3.6. In the city, the benchmark price of a home is $392,700 as of May 2024, according to the CREA.
Calgary was listed as "seriously unaffordable" with a median multiple of 4.6, while Ottawa-Gatineau and Montreal were deemed to be "severely unaffordable," with median multiples of 5.3 and 5.8, respectively.
Notably, of the six Canadian markets included in the study (Edmonton, Ottawa-Gatineau, Montreal, Calgary, Toronto and Vancouver) none were found to fall into the category of "affordable" housing markets.
This article's cover image was used for illustrative purposes only.
LTT geographic visual map.