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January 24, 2011
The Demographia International Housing Affordability Survey uses the "Gold Standard" Median Multiple method to compare housing affordability across 325 housing markets in seven English speaking countries, including 25 housing markets in Canada. It shows that housing affordability is primarily a local, rather than national, issue, and that homebuyers in some Canadian markets face severe affordability challenges.
7th Annual Demographia International Housing Affordability Survey
Rating Housing Affordability
The Demographia International Housing Affordability Survey employs the ?Median Multiple? (median house price divided by gross annual median household income) to rate housing affordability (Table ES-1). The Median Multiple is widely used for evaluating urban markets, and has been recommended by the World Bank and the United Nations and is used by the Harvard University Joint Center on Housing.
More elaborate indicators, which mix housing affordability and mortgage affordability can mask the structural elements of house pricing are often not well understood outside the financial sector. Moreover, they provide only a "snapshot," because interest rates can vary over the term of a mortgage; however the price paid for the house does not. The reality is that, if house prices double or triple relative to incomes, as has occurred in many severely unaffordable markets, mortgage payments will also be double or triple, whatever the interest rate.
Historically, the Median Multiple has been remarkably similar in Australia, Canada, Ireland, New Zealand, the United Kingdom and the United States, with median house prices having generally been 3.0 or less times median household incomes in the principal affordability indexes (historical data has not been identified for Hong Kong). This affordability relationship continues in many housing markets of the United States and Canada. However, the Median Multiple has escalated sharply in the past decade in Australia, Ireland, New Zealand, and the United Kingdom and in some markets of Canada and the United States.
Housing Affordability in 2010 Housing affordability was little changed in 2010, with the most affordable markets being in the United States and Canada. The United Kingdom, Australia and New Zealand continue to experience
Major Metropolitan Markets:
The 325 markets include 82 major metropolitan markets (those with more than 1,000,000 population).
Among these major metropolitan markets, there were 20 affordable major markets, 25 eight moderately unaffordable major markets, 13 seriously unaffordable major markets and 24 severely unaffordable major markets. All of the affordable major markets were in the United States while three of the moderately unaffordable markets were in Canada, with the other 22 being in the United States. The seriously unaffordable markets were concentrated in the United Kingdom and the United States. The severely unaffordable were principally in the United Kingdom (9), Australia (5) and the United States (5). There were three severely unaffordable major markets in Canada (Table ES-2).
Among all 325 markets surveyed, there were 115 affordable markets, 106 in the United States and 9 in Canada. There were 94 moderately unaffordable markets, 74 in the United States, 17 in Canada and 3 in Ireland. There were 42 seriously unaffordable markets and 74 severely unaffordable markets. Australia had 27 severely unaffordable markets, followed by the United Kingdom with 21 and the United States with 15. Canada had 6 severely unaffordable markets, while New Zealand had 4. China's one included market, Hong Kong, was also severely unaffordable
Freedom to Build:Homes For The Homeless – January 6, 2010
Canada’s homeless population is primarily a symptom of a restrained housing supply, and government initiatives will continue to fail while the underlying cause is not addressed.
6th Annual Demographia International Housing Affordability Survey – January 25, 2010
The 6th Annual Demographia International Housing Affordability Survey covers 265 markets in Australia, Canada, Ireland, New Zealand, the United Kingdom and the United States.
Don’t Regulate the Suburbs: America Needs a Housing Policy That Works – March 20, 2009
Senior Fellow Wendell Cox and Ronald Utt examine housing policies under consideration in the United States, focusing on the negative impact of 'smart growth'.
Wendell Cox, Senior Fellow, is principal of Wendell Cox Consultancy, an international public policy, demographics and transport consulting firm. He has developed a leadership role in urban transport and land use and the firm maintains three internet websites: www.demographia.com, www.publicpurpose.com and www.rentalcartours.net . Wendell Cox has completed projects in Canada, the United States, Asia, Australia, New Zealand, Europe and Africa. He is author of "War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life" and a co-author with Richard Vedder of
"The Wal-Mart Revolution: How Big-Box Stores Benefit Consumers, Workers, and the Economy."
He was appointed to three terms on the Los Angeles County Transportation Commission which oversaw highways and public transit in the largest county in the United States. He was also appointed to the Amtrak Reform Council. Wendell Cox is visiting professor at the Conservatoire National des Arts et Metiers (a national university) in Paris.