While it may not come as a surprise to locals, Vancouver has been ranked the least affordable housing market in North America.
Published by Oxford Economics, the Housing Affordability Indices (HAIs) report finds that "affordability deteriorated in nearly all U.S. and Canadian metros" in the second quarter of 2021 as "home price inflation outpaced income growth." Particularly, metropolitan areas along the Pacific coast were among the least affordable.
Report authors note that Canada's housing market worsened in the second quarter and that trend is expected to continue. A typical Canadian home costs 35 per cent more than the borrowing capacity of median income households.
"The index has risen 10 pts over the past year, as sharply higher prices dominated the effects of lower mortgage rates and higher incomes," reads the report.
Vancouver was the least affordable of all North American housing markets. However, the assessment finds that "housing continues to be more affordable in the U.S. than Canada." In fact, eight of nine Canadian cities saw affordability worsen in the second quarter.
Vancouver also saw its affordability worsen the most out of all North American housing markets. Montreal was second worst, followed by Toronto. Ottawa was the fourth worst, while Hamilton rounded out the top five. And, while report authors expect that house prices will plateau, they "expect rising mortgage rates will weigh heavily on affordability."
The report indicates that affordability will also worsen more quickly in Canada than in the U.S., largely reflecting higher Canadian mortgage rates.
Have a look at the overall ranking of North American markets.
Wanting to find somewhere affordable to rent in Metro Vancouver. Have a look at the cheapest neighbourhoods to rent in.