DEMOGRAPHIA at Brian Ripley's Canadian Housing Price Charts & Plunge-O-Meter

14th Annual Demographia Ranking
of Canada's 6 Biggest Metros 3Q 2017
All 46 Demographia RANKED CITIES IN CANADA
and SOURCE NOTES and PAST RANKINGS below.

Thanks to Hugh Pavletich and Wendell Cox co-authors of the Demographia International Housing Affordability Survey. This chart shows that Vancouver BC continues to rank as the least affordable city out of the 46 largest Canadian cities with a multiple of 11.8 times median household income required to buy a median priced house. As of Q3 2017 the 6 cities ranked from least to more affordable are: Vancouver 12.6, Toronto 7.9, Montreal 4.5, Calgary 4.1, Ottawa 3.9 and Edmonton 3.7

CLICK CHART TO ENLARGE

ALL 46 DEMOGRAPHIA RANKED CITIES in CANADA are TABLED BELOW

DEMOGRAPHIA RANK BELOW

14th Annual Demographia Price / Income
Ranks of 46 Canadian Cities 3Q 2017
Affordable when under 3 and Severely Unaffordable when over 5

The table below is sorted with the highest ratio of median housing cost to median household income at the top showing that Vancouver is the most unaffordable city in Canada requiring a buyer to pay 12.6 times annual income. Vancouver ranks 3rd most unaffordable city in 293 world markets after Sydney AU (2nd) and Hong Kong CN (1st).

DEMOGRAPHIA NOTES

"As a city develops, nothing is more important than maintaining mobility and housing affordability." Alain Bertaud

Affordability is the ability for any urban household to be able to rent a dwelling for less than a 25% of its monthly income, or to buy one for less than about three time its yearly income. The mobility and affordability objectives are tightly related.

A residential location that only allows access to only a small segment of the job market in less than an hour commuting time has not much value to households, even if it is theoretically affordable.

CLICK CHART TO ENLARGE

House prices have been rising well above the economic fundamentals in Canada for at least a decade. Both international and national organizations have expressed concern about the damage that Canada's rising prices (some suggest a “housing bubble”) could do to the national economy. Demographia Page 14 3Q 2017

The following are notes on the data from Demographia's reference to other studies:

RBC 2017 REPORT: Vancouver, Toronto and Victoria—in that order—continue to be where local buyers are least able to afford a home in Canada. That capability decreased further in all three markets in the third quarter. Keep Reading

UBS 2017 REPORT: Bubble risk seems greatest in Toronto, where it has increased significantly in the last year. Stockholm, Munich, Vancouver, Sydney, London and Hong Kong all remain in risk territory, with Amsterdam joining this group after being overvalued last
year. Keep Reading

CMHC 2016 REPORT: According to the Canada Mortgage and Housing Corporation (CMHC) there has been “strong evidence of problematic conditions for Canada overall. Home prices have risen ahead of economic fundamentals such as personal disposable income and population growth, resulting in overvaluation in many Canadian housing markets. Keep Reading

BANK of CANADA 2015 REPORT: Over the past decade, an increasing proportion of households in Canada have become highly indebted relative to their income. These highly indebted households now hold one-fifth of total Canadian household debt.Simulations suggest that this greater degree of household indebtedness could exacerbate the impact of shocks to income and interest rates relative to the pre-crisis period. Keep Reading

IMF 2015 REPORT: Further macro-prudential policy action may be needed to guard against risks to financial stability if household balance sheet vulnerabilities resume rising. Reforms to limit government exposure to housing markets and encourage appropriate risk retention by the private sector should continue. Keep Reading

OECD 2014 REPORT: The dominance of the crown corporation CMHC in the mortgage insurance market concentrates a significant amount of risk in public finances. Improving competitive conditions in the mortgage insurance market could help diversify these risks and reduce taxpayer contingent liabilities, while introducing coverage limits on loan losses would better align private and social interests. Keep Reading