The following chart shows the changes in affordability levels in some of Canada’s most active real estate markets over the past five surveys. Click the image for a larger view.

I was a bit surprised to see that affordability at a national level really hasn’t changed significantly in the past five years. Canada’s “median multiple” comes in at 3.7 years, up from the lows of 3.1 in Q3/2007 but just slightly higher than the 3.6 years in Q3/2005.

Vancouver “wins the gold medal” as the most severely unaffordable housing market in the world requiring 9.3 times to median household income, an increase of almost a year in just twelve months time.

See the entire Demographia survey for 2010 and past reports for 2009, 2008, 2007, 2006.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Real estate geeks can follow our daily updates on Twitter @norm_fisher.

Our Saskatoon home search tool offers MLS listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

No matter how you view the Frontier Centre for Public Policy’s International Housing Affordability Survey, you’d be hard pressed to make a convincing argument that housing affordability hasn’t suffered a serious blow in Saskatoon over the past couple of years. In fact, you’d have to be a fool to even try. When the average selling price of a home nearly doubles in two years time you’re going to see some pretty serious deterioration in affordability. Most of us didn’t need an “international study” to tell us that the cost of home ownership has skyrocketed here but some might be a bit surprised to learn that no other city in Canada has seen affordability deteriorate to the same extent as Saskatoon. According to the study, Saskatoon is now among the ranks of the “seriously unaffordable.”

I suppose the greatest value of this kind of study, if you feel you can trust the methodology and actual statistics, is that it provides a bit of a benchmark as to how we’re doing locally compared to other markets around the world. The Demographia study looks at 265 housing markets and determines housing affordability for each assigning a “median multiplier” as its affordability measure. The “median multiplier” shows you how many years of median household income it takes to buy a home priced at the median in each market.  We’re not quite sure which median income measure was used, or how a “house” is actually defined, but let’s assume that these measures are consistent from one survey to the next and see how things have changed in relation to some other Canadian markets. Here’s a quick look at the changes over the last three survey periods.

Recent price declines would suggest that Saskatoon might have already bottomed out as far as affordability is concerned, at least for now. I haven’t been able to make sense of the “median price” that the Demographia study has used for Saskatoon, but I can say with certainty that the median price of a Saskatoon house has been $21,250 lower over the past 90 days compared to the third quarter of 2008, the period that is measured for the study. It’s down $38,000 from its peak in Q2 when the median price of a Saskatoon house hit $315,000. Things are starting to look up for affordability. With any luck, we’ll be back in the “moderately unaffordable” category soon, and even that has a nice ring to it right now.

See the latest Demographia Affordability Study here
A copy of the 2008 study is here (data from Q3/07)
A copy of the 2007 study is here (data from Q3/06)
See the Star Phoenix story on this study here
And another Star Phoenix story here

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Norm Fisher
Royal LePage Saskatoon Real Estate

The survey, prepared by Pavletich Properties Ltd. compares median incomes in 227 markets around the world to median housing prices for the area. Their method of measuring affordability is based on a “median multiple” which is arrived at by dividing the median price of a home by the median income for each municipality. A “median” is the number separating the higher half of a sample from the lower half. For instance, if the median price of a home in Saskatoon is $212,900, we can assume that half of all homes sold here sell above that number and the other half below.

In their 2007 survey, which was based on data from the third quarter of 2006, Saskatoon was tied for 15^th on the “Most Affordable” list. At that time, the median Saskatoon income was $52,100 and the median price of a home in the city was $138,000. Buyers could expect to pay about 2.6 times annual income for a home.

Just one year later, the median income has shown good growth to $60,900 but the median price of a home has risen sharply to $212,900, or 3.5 times annual income, moving us to 77^th place internationally on the “Moderately Unaffordable” list.

In spite of some deterioration in affordability, Regina managed to maintain its place on the “Most Affordable” list sliding from first place to 12^th place, while seeing their median multiplier increase from 2.0 to 2.4. Neither incomes, nor housing prices increased in Regina to the degree that they did in Saskatoon.

Thunder Bay was noted as the most affordable place to own a home out of all of the markets surveyed. You can purchase a residence there for only 1.8 times annual income. Other Canadian markets making the “Most Affordable” list include Saguenay, St. John, St. John’s, Windsor, Quebec, Trois-Rivieres, Winnipeg, Sudbury, London, Oshawa and Ottawa.

Canada’s “Moderately Unaffordable” markets include Barrie, Halifax, Kingston, Kitchener-Waterloo, Sherbrook, Hamilton, St. Catherines-Niagara and Montreal.

Markets landing in the “Seriously Unaffordable” category include Edmonton, Calgary, and Toronto.

The “Severely Unaffordable” list includes Abbotsford, Victoria, Vancouver and Kelowna which is billed as the least affordable market to own a home in Canada. Kelowna home buyers can expect to pay 8.5 times annual income for a home.

In Los Angeles, California a home costs 11.5 times annual income making it the least affordable place in the world to own a home.

Deteriorating housing affordability is a major issue around the world and a leading contributor to the growing gap between the world’s rich, and the poor. In the introduction to this report, Dr. Donald Brash writes, “And the one factor which clearly separates all of the urban areas with high median multiples from those with low median multiples is the severity of the artificial restraints on the availability of land for residential building…Despite all of the evidence, governments continue to pretend that they are powerless to make housing more affordable or, worse still, implement futile interventions which make the situation worse…”

Read the full Demographia International Housing Affordability Survey: 2008 here.

My post on the 2007 survey including a link to the survey is here.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate

The survey measures median incomes for each market and compares them against housing prices to arrive at “median multiple.” The survey considers a home “affordable” if it costs less than three times a household’s gross income.

Saskatoon tied for 15^th place with six American markets including Pittsburgh, Pennsylvania and Syracuse, New York.

Topping the list of the “world’s most affordable” was Regina, our neighbour to the south which was tied for first place with Fort Wayne, Indiana. Quebec City and Winnipeg were the only other Canadian cities which were marginally more affordable than Saskatoon. Ottawa, Oshua and London also made the list of “affordable” places to buy a home, but just barely. Houses in Ottawa are 2.9 times the median income for the area while Oshua and London command prices which are 3 times the median income.

Houses in Montreal, St. Catherines, Edmonton and Halifax make the “moderately unaffordable” list.

Toronto and Calgary were classified as “seriously unaffordable.”

Vancouver and Victoria were rated as “severely unaffordable.” Vancouver came in as 13th in the world for “most unaffordable.” Expect to pay 7.7 times the median income in the area for a typical house.

According to the survey, Los Angeles-Orange County, California is the world’s most expensive markets. Typical houses cost 11.1 times the median income for the area.

Read the whole survey here.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @norm_fisher.

Norm Fisher
Royal LePage Saskatoon Real Estate