Vancouver’s average home price of $820,753 makes it by far the least affordable city in a country where affordability is dropping nationwide, according to a new report by financial group Desjardins.
The city posted an affordability index of 68.4, which is Desjardins says calculated by determining the ratio between the average household disposable income and the income needed to obtain a mortgage on an average-priced home (qualifying income).
Vancouver’s current index was even lower than its own historical average of 81, although it is an improvement of the low of 61 seen in 2011. The gap between Vancouver’s index and its historical average was also cited as the largest of all metropolitan areas surveyed.
Of all the other metropolitan areas surveyed, Toronto ranked second last for affordability, posting an index of 106.3, lower than its historical average of 112.
Desjardins cited the current nationwide affordability index as 120.5, a little lower than its historical average of 122.
Desjardins noted, “Despite lower affordability in Canada, property sales remain surprisingly strong, particularly in Vancouver, Calgary and Toronto, where sales have climbed 18.0 per cent, 13.7 per cent and 4.7 per cent respectively since the beginning of the year. Persistently low mortgage rates have given these markets a second wind, resulting in sharp price increases. Thanks to the booming economies in these metropolitan areas, their respective housing markets remain surprisingly strong despite being less affordable.”
The most affordable metropolitan area in the report was Saguenay in Quebec, which posted an index of 209.
To read the report, click here.
