Vancouver real estate ranks as the second most expensive in nine countries in the developed world as a multiple of the average resident's income for the second year in a row, according to St. Louis-based research firm Demographia.
Hong Kong remains the most expensive real estate market in those countries, with properties selling for an average 14.9 times the average resident's annual income. Vancouver earned the No. 2 spot thanks to its 10.3 multiple of average income. In 2011, the city ranked No. 3, behind both Hong Kong and Sydney.
San Francisco this year passed Sydney to become the No. 3 most expensive real estate market with a 9.2 multiple of average income. It now costs nine times the average annual income to buy real estate in Australia's largest city.
No other Canadian cities ranked in the top 10, which includes San Jose (8.7 multiple), Melbourne (8.4 multiple), Auckland (8 multiple), San Diego (7.9 multiple), Los Angeles (7.7 multiple) and London (7.3 multiple).
Demographia principal Wendell Cox told Business in Vancouver that the region's agricultural land reserve (ALR) is largely responsible for high housing prices in Metro Vancouver.
"The leadership of B.C. has placed the preservation of agricultural land at a higher priority than the standard of living of people and the minimization of poverty," Cox said.
He accepted that Vancouver Mayor Gregor Robertson has taken some action with his housing affordability task force and initiatives such as more laneway housing.
But, he said those efforts at most could achieve minor gains.
"Forcing people to live on granny flats in the backyard represents a lower standard of living," Cox said.
"The basic reason Vancouver house prices are so unaffordable is that you do not allow a competitive market to operate on the fringe. That has been the story in every first world metropolitan area that has similar problems."
Demographia's survey used to be considered a gauge of housing prices in the English speaking world because countries such as China (outside Hong Kong) are not included.
The survey for the first time, however, included metropolitan areas of Japan and it does include the province of Quebec.
Cox said he includes data from all parts of the world where he is able to get sufficient data. Parts of Europe, such as France and Germany, were not included because actual unit prices for homes are not provided. Instead, prices are relayed in euros per square metre.
Countries included in the survey are Canada, U.S., Australia, Hong Kong, Ireland, Japan, New Zealand, Singapore and the U.K.
