Article content continued

What pushes Vancouver to the top of the unaffordability rankings is paltry wages. In Canada’s third-largest city, the median household earns the equivalent of US$61,036 a year — in line with Columbus and less than families in Omaha, Nebraska, Kansas City, Missouri and even Lancaster, Pennsylvania, a rural community of 59,000 known for cornfields.

Photo by Darryl Dyck/The Canadian Press

The Pacific Coast city’s property market is entering a slowdown after policymakers intervened with a slew of measures to temper demand, including a foreign buyers tax and tighter mortgage rules, along with higher interest rates. Sales hit a five-year low last month, while the number of homes on the market swelled to the most in three years.

But the figures show just how difficult it will be to close the affordability gap after a run up that’s seen the price of a typical home triple since 2005.

“You need one of two things: either Vancouver real estate prices need to halve to attain a certain level of affordability, or you need to double incomes,” Yan said.

As for Toronto, Canada’s biggest city is the eighth most expensive housing market on the list. With a median household annual income of US$65,833 — about as unaffordable as San Francisco or San Jose but still better than Vancouver. Low wages aren’t a Canadian problem either. Calgary, the oil-and-gas capital, ranks fourth on the continent in household earnings with US$83,650, while a well-paid government sector puts Ottawa above Dallas, Portland and Chicago with US$68,925 a year.

An outright correction would be potentially devastating — real estate development is the province’s largest industry and housing a key driver of the local economy. Doubling incomes is wildly ambitious — similar in scale to a 10-year goal that China has set for itself.

“That’s the Herculean task of what Vancouver is facing,” Yan says.

Bloomberg.com