VANCOUVER (NEWS 1130) – Which city do you think is the most unaffordable in the world?
It turns out two of the world’s top 10 least affordable housing markets are right here in Canada.
A report looked at more than 300 urban markets and found Vancouver and Toronto are beating out major cities like New York and London.
For the second year in a row Demographia listed Vancouver as the world’s second least affordable market only beat out by Hong Kong, and Toronto tied for six with Auckland.
Tsur Somerville is a professor with the UBC Sauder School of Business, he says most people just don’t make enough money to keep up with rising costs.
“Fundamentally the problem that we’ve been grappling with here for years which is housing prices that are out of sync with incomes continues to be a problem,” he says.
B.C. imposed a foreign buyers tax in 2016 and Ontario followed suit in 2017, but experts say thinking such policies were bulletproof solutions were problematic.
“The thought that all of a sudden, we could just sort of like deal with foreigners and then everything would be fine doesn’t deal with the fundamental challenges here that existed even before we started getting large increases in immigration and large increases in capital flows in the mid-80s,” Somerville says.
He adds part of the reason for such high rankings is the attractiveness of the cities to populations. He also highlights that the report based its data on single-family homes.
“If we take single-family houses and turn them into condos, the pricing of the remaining single-family houses happens to go up,” Somerville says. “So you know, you’ve got this kind of weird dynamic that way that that how we would solve our affordability problems wouldn’t necessarily register on the way they measure things.”
Meanwhile, one Canadian housing market stands out for the opposite reason.
Fort McMurray was listed as the world’s most affordable city.