Vancouver housing is ‘impossibly unaffordable,’ says new report

Vancouver housing is ‘impossibly unaffordable,’ says new report

Vancouver has been the first, second or third least affordable major market for each of the last 16 years

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Vancouver ranks as one of the least affordable places to live, according to a long-running report on housing affordability among a collection of wealthy nations.

Vancouver was the third-least affordable housing market after Hong Kong and Sydney, Australia, according to the 2024 Demographia International Housing Affordability Report.

“The study has grave implications for the prospects of upward mobility,” Joel Kotkin, director of the Center for Demographics and Policy at California’s Chapman University, which co-published the report, said in a statement. “The primary victims are young people, minorities and immigrants.”

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​​Vancouver has been the first-, second- or third-least affordable major market for each of the last 16 years, according to the report.

The study provides housing affordability ratings for 94 markets in eight nations: Australia, Canada, China, Ireland, New Zealand, Singapore, the U.K. and the U.S. It’s based on housing prices from the third quarter of 2023.

It rates housing markets from “affordable” to “impossibly unaffordable” based on their median multiple, which is a measure of median home price divided by median household income.

Vancouver was rated “impossibly unaffordable” in the report, which included housing markets in five other Canadian cities: Toronto, Montreal, Ottawa-Gatineau, Calgary and Edmonton.

Four of the six markets in Canada were rated severely or “impossibly” unaffordable. Only Edmonton and Calgary were rated as moderately unaffordable.

Notably, none of the 94 housing markets in the study were ranked as affordable.

Unaffordable housing in B.C. has also spread to smaller markets, the report says, including Chilliwack, the Fraser Valley, Kelowna and markets on Vancouver Island.

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Between 2015 and 2023, Victoria’s median score rose to 9.8 from 6.9. In Kelowna the median multiple rose to 8.6 from 5.9.

The report cited restrictive land use policies, like greenbelts and densification, as the primary driver of the housing affordability crisis.

“While intended to improve urban environments, they often result in severe land shortages and skyrocketing housing costs,” the report authors wrote.

Targeting restrictions on land use as the primary culprit of the housing crisis oversimplifies a complex problem with many contributing factors, said Andy Yan, director of the city program at Simon Fraser University.

He pointed to Metro Vancouver’s Agricultural Land Reserve, in which housing development is blocked for a number of valid reasons, including ensuring local food security and concerns that much of the land “is particularly exposed to climate change.”

Yan said some jurisdictions, like Singapore, have “very strong policies” on real estate investment that regulate speculation and purchasing investment properties. Last year, authorities in Singapore, where the Demographia report rated housing prices as “moderately unaffordable,” doubled the tax foreigners pay on real estate purchases to 60 per cent. Locals purchasing a second property pay a 20 per cent tax.

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“It’s also important to kind of note that they don’t necessarily talk about incomes,” Yan said. “In Vancouver, we may have this very high level of housing costs, but we have very low levels of income,” a combination that inflates the home price-to-income metric used in the study.

According to the 2021 census, the median household income in Metro was $90,000. In Toronto it was $97,000.

Yan said the report’s ratings touch upon a symptom of the housing crisis but fails to explore “the larger system causes.”

“It’s the start of a conversation,” he said. “Not the end.”

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