Canada’s Housing Market Now Less Affordable Than That Of The U.S.
Canada’s housing market is now twice as expensive as U.S.’s housing market. Now Vancouver’s market is far less affordable than Manhattan and San Francisco which are U.S.’s top two priciest cities.
As stated by an analysis of North American cities from Point2 Homes, an average house in Vancouver costs 17.3 times the average income in the city. However in Manhattan, an average house cost 15.6 times more than the average income and 13.8 in San Francisco.
“Although homes in San Francisco and Manhattan are more expensive than those in Vancouver, with median selling price of $1,270,000 and $1,207,500, respectively, a lower median income is what makes Vancouver’s affordability index higher than that of the two U.S. cities,” Point2 Homes wrote in its blog.
Even with the rapid growth in the prices of houses with this year’s slump, the city of Toronto came in as the 13th least affordable housing market in North America. Point2 Homes discovered that an average home in Toronto cost 7.5 times the average income. This therefore makes Toronto level with Queens, New York and Washington D.C. when it comes to housing affordability.
An average house for sale is priced at $485.680 which is almost twice the average house price in the U.S. priced at $258,300. In Canada, in order to afford to buy an average house you must spend up to 7.5 times the average income, whilst in U.S. you spend 4.6 times and 3.3 times in Mexico.
The constant rising of house prices in Canada especially in Vancouver and Toronto has made home ownership harder. As stated in a 2016 census data published recently, Canada’s home ownership rate has decreased in the past five years. This is the first time this is happening in decades.
In the report, 67.8 per cent of Canadians owned a house to their selves. This rate dropped from 69 per cent according to a household survey in 2011. The data also shows that young Canadians find it very difficult to own a home, not like how it was for their parents at their age.
At 30, up to 50.2 per cent of millennials in Canada had houses of their own in comparison to 55 per cent of those at the same age. However, affordability is now becoming a major problem worldwide, not only in Canada alone.
There was a survey done by Bloomberg on a housing affordability. It states that even the average income could not cover the cost of a 1,000-sqaure foot home, rent or even a three bedroom apartment in any of the 105 major cities of the world. However, it also notes that several cities in Canada are still affordable. In the list of the top 10 most affordable housing markets worldwide, three of them came from Canada namely Calgary, Montreal and Ottawa.