Anyone struggling to save month-to-month in Toronto, never mind one day afford a home, will not be surprised at a new report which ranks the city as one of the most “impossibly unaffordable” cities in the world.
According to the annual Demographia International Housing Affordability Report, Toronto ranked tenth on the list of the most expensive cities around the globe, although Vancouver beat us out coming in at third place behind Hong Kong in first and Sydney in second.
Looking at income-to-home price ratios in nearly 100 international metropolitan areas, the study revealed that pandemic-driven demand for homes with outside space, land use policies that limit urban sprawl, and investors “piling into markets” sent prices soaring.
The report then gave each city an affordability score, calculated by dividing the median house price by median household income. Cities over a 9.0 ranking are considered “impossibly unaffordable”, and Toronto secured an unfortunate 9.3 score.
Comparatively, Hong Kong in first place received a 16.7 score, Sydney received a 13.3, and Vancouver a 12.3.
Here are the top 10 most impossibly unaffordable cities around the world, according to the report:
- Hong Kong
- Sydney
- Vancouver
- San Jose
- Los Angeles
- Honolulu
- Melbourne
- San Francisco/Adelaide
- San Diego
- Toronto
Things aren’t predicted to improve either, estimating that real estate affordability in Toronto could worsen by the equivalent of multiple years of income each year.
One thing that COULD help, pointed out by a senior fellow at the Frontier Centre for Public Policy Wendell Cox, is following New Zealand’s strategy which requires local authorities to free up more land for immediate development.
As for the most affordable city in Canada? Edmonton, which is at least two-thirds more affordable than Vancouver.
Check out the study’s full findings here.