It probably comes as no surprise to residents of British Columbia – especially those in Vancouver, Victoria and the Fraser Valley – but the province once again has the least affordable homes in Canada. Toronto and Nanaimo round out the top 5, at third and fifth respectively.
How is Affordability Calculated?
The annual Demographia report, compiled by the Frontier Centre for Public Policy, considers affordability based on a "median multiple". The median is the middle point in a set of numbers: there are just as many values both above and below it. In this case, the median multiple is calculated by dividing the median house price by the median household income. Essentially, the number that results tells you how many times greater the cost of a house is than the household income.
The survey regards a median multiple of 3 or less to be affordable. Victoria's median multiple held steady at 8.1 compared to last year. Vancouver's value rose to 12.6 despite regulations introduced to cool the market, and Toronto also increased slightly to 7.9.
The Spill-over Effect
It's quite notable that in the 10 least affordable cities in Canada, only Vancouver and Toronto are considered major markets. However, the rest of the list is made up of communities that are experiencing a “spill-over” from these major urban centers – either people who are willing to commute hours each day to work, or homeowners who are cashing out of a hot market and looking for a more balanced lifestyle.
The Canada Mortgage and Housing Corporation agrees, with its most recent assessment noting that housing markets continue to be highly vulnerable across the country, with strong evidence of overvaluation and price acceleration; essentially, the cost of buying a home is increasing faster than the rest of the local economy.
What Can I Do To Buy a Home?
If your plans include buying a home in 2018, you'll want to focus on building up your down payment and making sure your credit is as strong as possible. Our Rent No More in 24 program can help you with both of those things if you think you need guidance.
If you're ready to start on your home buying journey, contact the Auxilium team today for a free consultation with one of our brokers. Call Toll-Free 1-855-590-6520 or visit us at 307 Goldstream Avenue during regular business hours. We can also arrange an appointment evenings or weekends to work with you.
Top 10 Least Affordable Cities in Canada for 2018
10) Barrie, Ontario
9) Guelph, Ontario
8) Hamilton, Ontario
7) Kelowna, British Columbia
6) Chilliwack, British Columbia
5) Nanaimo, British Columbia
4) Fraser Valley, British Columbia
3) Toronto, Ontario
2) Victoria, British Columbia
1) Vancouver, British Columbia
Auxilium Mortgage Corporation is based in Victoria, BC and works with clients locally and across Canada. The Auxilium team has over 100 years of combined financial experience and access to dozens of lenders to help you meet your goals.
