Montreal ranked one of the most "severely unaffordable" cities in the world: report

If you’re in the market for real estate in Montreal, prices are “severely unaffordable” when compared to other cities around the world.

The Urban Reform Institute recently released its 2021 report on international housing affordability and found that Montreal ranked 61st on its list of the top “severely unaffordable” cities across the globe.

The report looks at middle-income housing affordability in 92 major metropolitan housing markets in eight areas, which include Australia, Canada, Hong Kong, Ireland, Japan, New Zealand, Singapore, the United Kingdom, and the United States.

While 61st might not seem so bad, Montreal ranked as the 3rd most “severely unaffordable” city in Canada, behind Vancouver and Toronto.

Hong Kong rated as the most unaffordable, with Sydney, Australia and Auckland, New Zealand taking third and fourth place, respectively.

According to the report, the number of housing markets in both Canada and the United States that have become severely unaffordable has steadily increased since 2004.

Comparatively, Edmonton ranked as the most affordable real estate market in Canada and Pittsburgh topped the report’s worldwide list.

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In the early 2000s, the earliest version of the report rated up to 16 major markets in Canada and the United States as “affordable.” By 2019, that number dropped to 10, and over the past year, that number dropped even further, with only four markets rated “affordable,” all in the United States.

The report also details how the COVID-19 pandemic contributed to this year’s affordability rankings. Not only were many workers whose jobs could not be done remotely faced with either low or no wages, but a number of housing markets also saw escalating prices.

“This is in large measure a result of substituting telework for physical commuting, which gave households the flexibility to seek new housing with more space, indoors and outdoors,” the report reads. “This rapidly developing demand shock drove house prices up.”

The report also cites the International Monetary Fund’s World Economic Outlook, which found that “the pandemic will reverse the progress made since the 1990s in reducing global poverty and will increase inequality.”

Out of all the countries evaluated in the report, Canada had the smallest percentage of workers participating in telework but had the second-highest percentage of unemployed people.

The report anticipates that as remote working becomes more of the norm, it could reduce demand in major cities, which have historically been the least affordable areas.

“It provides the global middle class a ray of hope,” the Urban Reform Institute report says.

With files from Laura Hanrahan