Another day, another gloomy headline for Toronto’s housing market.
Demographia has just released its annual ‘Housing Affordability Survey‘ and has ranked Toronto as the 10th out of 293 cities around the world for unaffordability. This is up way from 21st place the year before.
The report measures middle-income housing affordability in 92 major metropolitan housing markets, which includes Australia, Canada, Hong Kong, Ireland, Japan, New Zealand, Singapore, the United Kingdom and the United States.
The report found that two of Canada’s six housing markets are “severely unaffordable” which include Toronto and Vancouver.
Toronto has a severely unaffordable housing market due to a more than doubling of middle-income house prices relative to incomes. The 2018 UBS Global Real Estate Bubble Index also rates Toronto as having the third worst housing “bubble risk” in the world.
According to the 2018 Third Quarter Canada Mortgage and Housing Corporation (CMHC) assessment, sourced in the report, “Housing markets for Vancouver, Victoria, Toronto and Hamilton remain highly vulnerable because of the detection of price acceleration and overvaluation. Most notably, high evidence of overvaluation is still observed in Vancouver, Victoria and Toronto where house prices remain higher than levels supported by economic and demographic fundamentals.”
Markets in the extended Toronto area (the “Greater Golden Horseshoe”) have also become severely unaffordable, according to the report. That includes Hamilton, Guelph, Kitchener-Waterloo, Peterborough, Cambridge, Oshawa, Barrie, St. Catharines-Niagara, and Brantford.
According to the report, the most affordable markets in Canada are Moncton, NB, Cape Breton, NS, Fort McMurray, AB.