An international study on housing affordability lists Calgary’s market as ‘seriously unaffordable’.
The 9th Annual Demographia International Housing Affordability Survey, which covers 337 metropolitan areas in Australia, Canada, Hong Kong, Ireland, New Zealand, the United Kingdom and the United States, employs the median multiple to rate housing affordability.
The median multiple is the median house price divided by gross before tax annual median household income.
The report said Calgary “experienced a substantial increase” from the year before as its median multiple jumped from 3.9 to 4.3 in the third quarter of 2012.
The survey explains that a median multiple of between 4.1 to 5.0 is considered in the ‘seriously unaffordable’ rating. Anything 5.1 and over is considered ‘severely unaffordable’.
Calgary was ranked number 226 on the list of 337 markets for affordability with a median price of $358,400 and a median household income of $83,900.
In November, the Housing Trends and Affordability Report by RBC Economics Research, which measures affordability by capturing the proportion of pre-tax household income needed to service the costs of owning a home at going market value, said affordability eased in the Calgary area to multi-year lows in the third quarter of 2012. Early 2009 was the last time two-storey homes had a measure this low and the measure for condominiums is at its lowest level since late 2005.
In Calgary, the measure for a detached bungalow was 38.3 per cent, down 1.5 per cent from last year. A standard two-storey home saw its measure drop by 1.0 per cent to 39.3 per cent and a standard condominium fell by 1.8 per cent to 22.7 per cent.
According to the Demographia survey, Vancouver was rated as the second most expensive market in the world with a median multiple of 9.5 which included a median price of $621,300 and a median household income of $65,200.
The most expensive market in the world was Hong Kong with a median multiple of $3,810,000 and a median household income of $282,000.
The most affordable international market was Detroit with a median multiple of 1.5 which included a median price of $75,700 and a median household income of $49,800.
The most affordable Canadian market was a tie between Fredericton and Moncton with a median multiple of 2.3 which was ranked 20th overall in the world in terms of affordability. Fredericton’s median price was $150,400 and its median household income was $65,000 while Moncton’s median price was $141,800 and its median income was $61,900.
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