Article content

Vancouver ranks as the second least affordable major city in the world after Hong Kong when it comes to buying a house, according to an international survey released this week.

At $621,300, the median home price in the city is 9.5 times the gross annual median household income, according to the report by U.S.-based consulting firm Demographia. That’s down slightly from a median multiple of 10.6 in 2011, but still places Vancouver in the ‘severely unaffordable’ category.

We apologize, but this video has failed to load.

tap here to see other videos from our team. Try refreshing your browser, or Vancouver housing ranked second least affordable in world Back to video

The report pinpoints so-called ‘urban containment’ policies, which seek to limit the amount of land developed in a city, as the culprit for the lack of affordable housing in Vancouver and other major Canadian cities such as Toronto and Montreal.

“Land prices for development on the urban fringe, if allowed at all, have been driven well above the ‘agricultural value plus premium’ levels that have generally characterized markets since World War II,” Wendell Cox, principal at Demographia, and Hugh Pavletich, who runs PerformanceUrbanPlanning.org, a website on urban public-policy issues, wrote in the report.

Demographia notes that while the federal government has tightened lending rules in Canada to assuage concerns about the frothy housing market, those measures fail to address urban containment.

“Urban containment has been associated with up to nearly 87 percent of house price increases.”

Hong Kong remained the most expensive housing market among those surveyed, with homes costing 13.5 times income, up from 12.6 a year ago.

The U.S. had the 32 most affordable major metropolitan housing markets, led by Detroit, Atlanta and Cincinnati.

With files from Bloomberg