Thursday, July 18, 2024

Ottawa housing market ranked as ‘severely unaffordable’ in global survey

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A new global report finds Ottawa’s housing market is ‘severely unaffordable’ a residents continue to struggle with the high cost of buying a home.


The study by Demographia, which examines international housing affordability, ranked Ottawa 40th in housing unaffordability across 94 major markets in eight countries, including Canada, China, Ireland, Australia, New Zealand, Singapore, the United States and the United Kingdom.


Each city is ranked based on its median multiple score which is determined by dividing the average house price in a city by its gross median household income.


A score under three is considered “affordable”, a score between 3.1 to four is considered “moderately unaffordable”, a score between 4.1 to five is considered “seriously unaffordable,” a score between 5.1 to 8.9 is considered “severely unaffordable.”


This year, a new category of “impossibly unaffordable” was added for cities scoring nine or higher.


Ottawa was given a score of 5.3, placing in the “severely unaffordable” category. That ranking makes Ottawa slightly more affordable than Montreal and around the same as Washington D.C.


Toronto and Vancouver were ranked as the most unaffordable cities in Canada. Toronto scored 9.3 and ranked 11 on the housing unaffordability list and Vancouver scored 12.3 and ranked third on the list.


Vancouver has been the first, second or the third least affordable major market for each of the last 16 years the study has been conducted.


“There has been a considerable loss of housing affordability in Canada since the mid-2000s, especially in the Vancouver and Toronto markets,” the study says.


“In contrast, there had been no deterioration in housing affordability in Toronto from 1971 to 2004 — more than three decades.”


The report highlights housing costs outpacing income growth as the main cause of the crisis in the countries studied.


In Canada, Edmonton is the cheapest market to buy a home and labelled as “moderately unaffordable,” with a score of 3.6. Calgary is listed as “seriously unaffordable” with a score of 4.6 and Montreal is also considered “severely unaffordable,” with a score of 5.8.


Nearly 90 per cent of the cities in the study did not fall into the highest rank of “impossibly unaffordable,” but none of the 94 cities scored below three, the cut off to be deemed “affordable.”


With files from CTVNews.ca

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