Due to the sky-high cost of living, Toronto has been recognized as having one of the least affordable housing markets in the world, according to a new report.
The findings come from the 16th annual Demographia International Housing Affordability Survey, which analyzed 309 housing markets in eight countries including Canada, the United States, Australia, New Zealand, Ireland, the United Kingdom, China, and Singapore.
Ninety-two major metropolitan markets (housing markets) were evaluated, including three megacities, with more than 10 million residents: New York, London, and Los Angeles.
To produce this year’s ranking, Demographia looked at data from the third quarter of 2019 using the “median multiple” approach, where the median house price is divided by the median household income. The more points a city has, the more expensive it is to live in, according to the ranking.
The survey shows that the most “severely unaffordable major housing markets” are currently in Australia, Canada, and China, with Hong Kong topping the list as the most expensive city to live in as of 2020.
According to the latest edition of Demographia’s annual global housing report, Vancouver and Sydney claimed the second and third spots, respectively, while Toronto has risen to the sixth spot out of 309 cities worldwide for unaffordability. This is up four spots from 2019 and 15 from 2018.
According to the report, Toronto has “severely unaffordable housing,” with its median multiple deteriorating to 8.6 from 8.3 in 2018 and 3.9 in 2004 (the first Demographic International Housing Affordability Survey).
The report also notes Toronto has “the second-worst bubble risk,” in the world (after Munich), worse than least affordable Hong Kong and second least affordable Vancouver.
It’s also noted that Ontario’s introduction of the foreign buyers tax in 2017 has made luxury home prices slightly less “volatile.”However, the report cautions that housing affordability in Toronto has continued to deteriorate in the middle of the market.
“In Toronto, the housing affordability loss has been associated with the mid-2000s adoption of urban containment policy (“Places to Grow”), including a Green Belt and other draconian restrictions. A Demographia Survey co-author predicted at the time that this would lead to worsened housing affordability.”
The Most Expensive Cities to Live in Around the World in 2020
- Hong Kong, China: 20.8
- Vancouver, Canada: 11.9
- Sydney, Australia: 11
- Melbourne, Australia: 9.5
- Los Angeles, United States: 9
- Toronto, Canada: 8.6
- Auckland, New Zealand: 8.6
- San Jose, United States: 8.5
- San Francisco, United States: 8.4
- London, United Kingdom: 8.2
You can read the full report here.