By Adrian Bishop
Housing in Vancouver, Canada, is the least affordable in North America, even topping Manhattan and San Francisco.
That’s the shock finding of a new survey about home prices and income in the 50 largest cities by population in the United States, Canada and Mexico.
With a median home sale price of $1,108,345, a median family income of $63,944, Vancouver is the most unaffordable market in North America at a median multiple of 17.3, according to the Point2homes
With a median selling price of $1,275,000 in San Francisco and $1,207,500 in Manhattan, property is more expensive than Vancouver, but higher income levels mean it is more affordable.
The median family income in Manhattan ($77,559) is considerably higher than the U.S. median of $56,516, but its real estate costs more than four times the national median sale price ($258,300). This gives a median multiple of 15.6.
San Francisco boasts the highest median income in the U.S. ($92,094). But even so, it would still take San Francisco residents 13.8 years to pay off the mortgage on the median property.
To measure affordability, the survey calculates the affordability ratio, also known as the median multiple, which is the median home sale price divided by the median annual family income. All amounts are quoted in U.S. dollars.
The higher this ratio is, the more time it takes to pay off a property. Severely unaffordable markets have a ratio of 5.1 or more, seriously unaffordable 4.1-5, moderately unaffordable 3.1-4 and affordable 3 and under, according to the International Housing Affordability Survey.
A Point2Homes writer says, “This has put home ownership out of reach for many first-time buyers, pushing them out of the local market. To make matters worse, even many well-paid local professionals are finding it increasingly difficult to afford housing in their communities.”
The rest of the top 10 are all in the United States - 4. Brooklyn, NYC; 5. New York; 6. Los Angeles; 7. Boston; 8. San Jose; 9. Seattle; 10. San Diego.
The annual median family income in Canada is $64,752, slightly above the American benchmark of $56,516. However, a Canadian home sells for the median price of $485,680 USD – almost twice as much as the median sale price in the United States of $258,300.
With a median multiple of 7.5, Canada is the most unaffordable housing market in North America. The median multiple in the United States is 4.6.
A Mexican home costs just $41,748 on average, but the median income is also lower at $12,806. This makes the median multiple in Mexico 3.3, which is considered moderately unaffordable.
In Vancouver, three-quarters (76%) of homes are valued at $1-million-plus. Toronto is the second most unaffordable market in Canada with a median home sale price of $471,600 USD and a median income of $62,624. This means Toronto’s affordability ratio is 7.5, considerably less than Vancouver’s 17.3. It would take you 10 years longer to pay off a house in Vancouver than it would in Toronto.
With higher salaries and enviable home sale prices, Calgary, Ottawa and Edmonton are the most balanced Canadian housing markets. The median income is $81,496 in Edmonton and $83,256 in Ottawa. With equally advantageous home sale prices, $287,960 and $291,120, respectively, these two cities have the second lowest affordability index in Canada, 3.5.
Calgary comes close to Ottawa and Edmonton in terms of median income. But with a slightly higher median home sale price, $340,000 USD, the median multiple rises to 4.1.
With a median multiple of 3.4, Winnipeg is the cheapest Canadian real estate market. While the median income is near the national benchmark, Winnipeg homes have the lowest median selling price of any major city in Canada at $225,254 USD.
With a median multiple of only 1.8, Detroit ranks as the most affordable market in North America and some of the lowest home values in the U.S., at around $48,000. However, it also ranks worst in terms of median family income, just $25,980.
In Mexico, Acapulco is the most unaffordable city in Mexico, at 6.9, with an average income of $6,171 and an average home sale price of $42,776.
Mexico City takes second place with an average home sale price of $83,911. Despite being one of the highest-paying cities in the country, with an average income of $13,780, the affordability ratio remains fairly high at 6.1.
The thriving city of Monterrey boasts the highest national average income, $14,954. By contrast, the average home sale price is below the national benchmark, currently standing at $40,235. This results in an extremely low affordability ratio of 2.7, which makes Monterey the most affordable housing market in Mexico.