World's least-affordable cities

The cost of buying a home in Canada contrasts significantly from coast to coast, with some of the world's least-affordable cities on the West Coast, while some markets in Eastern Canada remain relatively inexpensive, says a survey of cities worldwide released on Wednesday.

According to the fifth annual Demographia International Housing Affordability Survey, Vancouver sits fourth on the list of least-affordable cities in the world, with a median house price at 8.4 times the median income. That means it costs 8.4 years' average income to purchase a house. The average median in Canada was 3.5.

The New York-based Demographia report, released in Canada by the Frontier Centre for Public Policy, looked at third-quarter 2008 data in 265 metropolitan markets, including Australia, Canada, Ireland, New Zealand, the United Kingdom and the United States and defines affordable home prices as three times a city's median income or less.

Vancouver fell behind Gold Coast in Australia, at No. 3, Honolulu, at No. 2, and Australia's Sunshine Coast, which is in top spot on the least-affordable list.

All of Canada's "severely unaffordable" cities are in British Columbia, including Victoria, at seventh, Kelowna, at 19th and Abbotsford, at 25th.

No Alberta city made either list.

The survey uses existing house sales data to rate housing affordability in 265 global markets. There are 87 "affordable" markets, 74 "moderately unaffordable" markets, 49 that are "seriously unaffordable" markets and 64 are "severely unaffordable."

All of the 87 "affordable markets" are in Canada and the U.S., while most markets in Australia, Ireland, New Zealand and the U.K. are rated as "severely unaffordable." There are 77 affordable markets in the U.S. and 10 affordable markets in Canada.

"Regardless of where you live in the world, one can buy most needs and wants from a variety of places: food from France, cars from Japan, and oil from Oman at the world price. In contrast, perhaps the most obvious feature of houses is that they are not very mobile. For homes, you must buy those available in your local market, or uproot yourself and move," the Frontier Centre said in a release.

"Housing prices are arguably more important than any other item for purchase -- home ownership anchors people into the community, which they value more when they own a part of it. House prices are also a big lever on the world economy, as recent events south of the border have brutally proven. When prices are high for any reason, they have further to fall and they create losses that are harder for people to recover from. Societies with affordable housing offer community, opportunity, and economic stability. When affordability is lost, many people end up poorer, socially marginalized, and in less stable economies," the centre said.

While B.C. cities ranked poorly, several cities on the other side of the country made the most affordable list.

Cape Breton Island in Nova Scotia is Canada's most affordable market area and sits at No. 5 on the list behind four U.S. markets, while Moncton, N.B, is also considered affordable. The Ontario cities of Thunder Bay and Chatham also ranked as affordable at Nos. 12 and 17 respectively.

Winnipeg was the largest city to be included on the affordable list with a 3.0 median, although it is near the bottom of the list.

Ottawa-Gatineau, while rated "moderately unaffordable" is considered the most affordable major market in Canada with median multiple of 3.4.

The average price of a house in Vancouver in December 2008 was $560,953 and $444,222 in Victoria. That's compared to $182,814 in Winnipeg and $272,672 in Ottawa. In Nova Scotia, outside of Halifax, the average price of a home was $181,945, according to the latest figures from the Canadian Real Estate Association.

BY THE NUMBERS

MOST AFFORDABLE HOUSING MARKETS WITH MEDIAN YEARS' INCOME:

- Youngstown, Ohio 1.8
- Fort Wayne, Ind. 1.9
- Evansville, Ind. 2.0
- Cape Breton, N.S. 2.1
- Canton, Ohio 2.1

LEAST AFFORDABLE HOUSING MARKETS WITH MEDIAN YEARS' INCOME:

- Sunshine Coast, Australia 9.6
- Honolulu, 9.1
- Gold Coast, Australia 8.7
- Vancouver, B.C. 8.4
- Sydney, Australia 8.3

(prepared by Tiffany Crawford/Edmonton Journal)