Despite the grumbling of homeowners that the assessment value for their homes is astronomical when it comes to property taxes, yet another international survey has placed Ottawa as one of the most affordable housing markets in the world.
The Demographia International 2007 Housing Affordability Survey, released Monday, rated housing affordability for 159 major urban markets in Australia, Canada, the Republic of Ireland, New Zealand, the United Kingdom and the United States.
The research measured how many years it would take a worker earning the average wage in the particular city to earn enough money to equal the average home price.
"Affordable" was three years or less, "moderately unaffordable" was 3.1 to 4.0 years, "seriously unaffordable" was 4.1 to 5.0 years and "severely unaffordable" was 5.1 years and over.
In Canada, there were seven affordable markets – including Ottawa at 2.9 – and six moderately unaffordable markets.
The most affordable city in Canada was Regina with a rating of 2.0, which was tied for first place with Fort Wayne, Indiana, and Youngstown, Ohio. Quebec and Winnipeg both came in close behind at 2.5 and Oshawa came in at 3.0. All of the most affordable markets were in North America, with 35 in the United States and seven in Canada.
On the flip side, Vancouver and Victoria were rated severely unaffordable. Researchers found it would take someone earning the average wage in Vancouver 7.7 years to earn the same as the average price of a home. Victoria came in slightly better at 6.6, still more than twice the affordability threshold.
Five of the top 10 most unaffordable markets were found in California and included Los Angeles-Orange County (11.4), San Diego (10.5), San Francisco (10.1), Ventura County (9.4) and San Jose (8.4). Australia, surprisingly, came out as one of the least affordable markets researched.
The numbers were striking and were not good news for the cities affected by lack of affordable housing. Sydney had a median of 8.5, Perth stood at 8.0, Hobart 7.0 and Melbourne at 6.6
"The housing affordability crisis is of recent origin, having principally arisen over the past decade. Median Multiples of four or more were rare before the 1990s. Median multiples of double the affordability standard – 6.0 and above – were unprecedented," stated the report. "Yet, today, the median multiple exceeds 8.0 in a number of markets and is more than 10 in some. Today's least affordable markets were largely affordable in the not too recent past.
"This is illustrated by the situation in Australia . . . In all markets there has been a marked loss of affordability over the past 10 years."
Demographia said these high numbers went beyond an inconvenience for people shopping for new homes. It warned that the extra expenditures for housing could considerably reduce purchasing power and were likely to lead to less economic growth and job creation in the future.
"Each nation has increased its home ownership rates markedly since World War II ... This better quality of life appears to be threatened across the spectrum, from lower income households that will no longer be able to afford home ownership to middle income households, who will be able to afford only more modest houses. The unprecedented decoupling of house prices from incomes could lead to significantly reduced home ownership rates in the decades to come," the report stated.
At the end of 2006, an RBC survey found that the average Vancouver resident spent a whopping 70.1 per cent of their income on housing while Ottawans spent 30.8 per cent.
