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Vancouver rated world's 2nd least affordable housing market
Vancouver is the second least affordable city in the world for housing, coming just behind Hong Kong in a 2014 survey by U.S. think tank Demographia.
The survey provides its own "ratings for metropolitan markets" and their housing markets, and looked at nine countries: Canada, Australia, Hong Kong, Ireland, Japan, New Zealand, Singapore, and the United States. It's the 10th year of Demographia's survey, and it analyzed 360 individual metro markets.
"Housing affordability is considered in the Demographia Survey at the middle of the market, and thus uses median house prices and median household incomes," the survey reads, meaning it intends to analyze the average family. Its metric is what it calls the "Median Middle" – the median house price divided by gross annual median household income.
Demographia calculates an affordability rating for its markets, and a 5.1 or above is considered severely unaffordable. A rating below 3.0 is considered affordable.
Vancouver was given a 10.3, and Hong Kong a 14.9. Toronto was second among Canadian major cities at 6.2. Victoria rated at 6.9, and Kelowna and the Fraser Valley came in at 5.9.
"Housing affordability worsened in Canada's major metropolitan markets, which have an overall rating of severely unaffordable, at a Median Multiple of 4.5," the survey reads. "The housing affordability losses were concentrated in Vancouver, which continues to be the most unaffordable metropolitan area except for Hong Kong."
2014 marks the sixth straight year Vancouver has been rated the world's second least affordable city by Demographia.
San Francisco came third in the list with a rating of 9.2.
The survey and Demographia's metrics have been criticized, however, with New Zealand-based property group exec Andrew King calling it "too simplistic" (Stuff NZ).
"What the Demographia survey tells us is that we are paying a great deal to own our houses," said Dominick Stephens, chief economist of Australian bank Westpac. "What it doesn't say is why.
"However, you can't really call houses unaffordable when clearly they sell every day."
Demographia's survey was introduced and authored by Alain Bertaud, an urbanist from New York University and a former principal planner for the World Bank, according to his own bio.