Canada's Housing Bubble

Jan 26, 2010 Dharm Makwana 24 Hours

If you want affordable housing it’s best to grab your things and go

Vancouver may be the most beautiful place on earth but if you want affordable housing it’s best to grab your things and go.

So says St. Louis-based demographic consultant Wendell Cox who authored a study, released by Frontier Centre for Public Policy Monday, which ranked Vancouver as the least affordable housing market in 2009.

The report measured affordability by dividing the median house price divided by the median gross annual household income in 28 Canadian cities among 272 markets across the U.S., the U.K., Ireland, Australia and New Zealand and Canada.

In Vancouver nine times the median annual household income before taxes is needed to purchase a home at the median price – roughly $540,000.

Historically median house prices in the six nations studied have been three times median income.

Cox said the lack of affordable land in Vancouver, due to strict zoning regulations, had caused the disparity.

The consultant suggests loosening regulations to build housing developments on the city’s fringe in hopes of creating more-affordable housing stock.

Even when the economic downturn is considered Vancouver grew more expensive in 2009 than in 2008.

“The basic problem in Vancouver is the demand for housing far exceeds the availability of affordable land,” Cox said. “So even in a downturn it’s not surprising in a market like Vancouver to see prices stabilize.”

Young families considering a starter home should resign themselves to living in an apartment condo for the rest of their lives, Cox said.

“My advice is to get to Calgary as fast as you can,” he said. “It’s not great in Calgary but it’s a whole lot better than it is in Vancouver.”