North America’s Most Unaffordable Housing Market is Vancouver

Vancouver’s real estate market is North America’s most unaffordable, according to a recent study by Point2 Homes. Even notoriously inaccessible markets like San Francisco and Manhattan couldn’t reach the unaffordability level of the Canadian city.

To find out where the 50 most populous cities in Canada, the United States, and Mexico stand in terms of affordability, the study calculated the “median multiple,” which divides the median home sale price by the median annual family income, for each. Higher ratios meant wider gaps in affordability, as well as more time required to pay off a home. The study used U.S. dollars to express all monetary amounts.

Vancouver’s median home sale price of $1,108,345 and median family income of $63,944 resulted in the Vancouver real estate market achieving a median multiple of 17.3. Manhattan and San Francisco, the second and third most unaffordable real estate markets in North America, respectively, have higher median home prices than Vancouver does, but also higher median family incomes, which helps to limit the affordability gap somewhat for those markets.

Manhattan’s median multiple of 15.6 was calculated using the borough’s median home sale price of $1,207,500 and median family income of $77,559. San Francisco, which has a median home sale price of $1,275,000 and a median family income of $92,094, scored a median multiple of 13.8.

Understanding the severity of the situation requires referring to The International Housing Affordability Survey’s ratings. For example, markets with median multiples of 5.1 and over are considered “severely unaffordable,” while median multiples of 3.0 and under indicate more affordable housing markets.

Breakdown by Country

With Vancouver topping the list of most unaffordable markets, it’s not much of a surprise that Canada ranks as the country with the most unaffordable housing market in North America as a whole. The country’s median multiple sits at 7.5, based on an annual median family income of $64,752 and a median home price of $485,680.

With a median multiple of 4.6, the United States comes in second. The affordability level of this country is based on an annual median family income of $56,516 and a median home price of $258,300. Mexico ranks as the most affordable country in North America, with a median multiple of 3.3. Its annual median family income of $12,806 and median home price of $41,748 mean it is considered only moderately unaffordable.

Most Unaffordable North American Markets

Toronto (7.5), Mississauga (7.4), and Montreal (4.2) are other Canadian markets that ranked high on the list, but are far from being as unaffordable as Vancouver. Toronto’s median multiple of 7.5, which was calculated based on the city’s median home sale price of $471,600 and median income of $62,624, means that paying off a home in Vancouver would take 10 more years than it would in Toronto.

Other housing markets in America that have high median multiples include Brooklyn (13.1) and Los Angeles (12.1). Mexican markets that topped the list include Acapulco (6.9), Mexico City (6.1), and Puebla (5.9), although the most unaffordable Mexican real estate markets don’t show up until #15 on the list, with plenty of American and Canadian markets soaring high above them in terms of unaffordability.

Most Affordable North American Markets

The results of the study indicate many markets that put homeownership out of reach, not just for first-time homebuyers, but also for local professionals who struggle to afford a home in these markets. In fact, 32 of the 50 markets Point2 Homes looked at were rated as seriously or severely unaffordable.

When looking for more affordable places to own a home, potential American buyers can look to the city of Detroit, which has the most affordable housing market in the U.S., as well as in North America as a whole, at 1.8. Winnipeg boasts Canada’s most affordable market with a median multiple of 3.4, and Mexico’s least unaffordable market is Monterrey, at 2.7.

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