Vancouver has beaten out San Francisco and Manhattan as the most unaffordable real estate market in North America, according to findings from a Point 2 Homes study published November 6.
To measure affordability, researchers at Point 2 Homes compiled data on home sale prices and median family incomes in 50 cities throughout Canada, the United States and Mexico. They created an affordability ratio, or “median multiple,” calculated by dividing the median home sale price by the median annual family income, all in US dollars. The higher the ratio, the longer it would take someone in each city to pay off their home.
The study found the median home sale price in Vancouver to be $1,108,345, and the median family income to be $63,944. This median multiple of 17.3 placed Vancouver higher than San Francisco and Manhattan, despite the fact that home sale prices in the two American cities were higher. It’s Vancouver’s lower median income than San Fran’s or Manhattan’s that ultimately makes it more unaffordable by the study's standards.
However, the study doesn't take into account other variables within the cities, such as privately held wealth, median mortgage balances, interest rate differences and so on (read our editor's editorial on affordability studies).
Check out Point 2 Homes’ affordability index below.