Where Is The Home Ownership Rate Headed ?
In todays episode, your hosts Daniel Foch and Nick Hill covers a report that provides some valuable insights and tries to answer some tough questions.
How did we end up in this housing crisis?
What are the most affordable and least affordable markets & how did they become this way?
what is the greatest driver of these increased costs & how does Canada compare to the like of Australia, New Zealand, The USA & the UK
In addition, we also take a look at the current top 10 most liveable places.
Key Takeaways:
The Demographia International Housing Affordability Report highlights the growing issue of housing inflation globally, attributing high prices largely to policies limiting peripheral growth in cities like the UK, California, Washington, and much of Canada.
Canadian cities like Vancouver and Toronto rank among the most unaffordable. Policies like the greenbelt in Ontario contribute to high land and house prices by limiting development, making it difficult for middle-income households to afford housing.
There is substantial variation in homeownership rates among the studied nations. Singapore has the highest rate at 89%, followed by Ireland and Canada. Hong Kong has the lowest homeownership rate at 51%.
The unaffordability crisis in Vancouver has spread to smaller markets in British Columbia like Chilliwack, Fraser Valley, and Kelowna, as well as Vancouver Island. This trend mirrors worsening affordability in these regions compared to Vancouver itself.
From 2015 to 2023, the equivalent of 2.5 years of median household income was added to housing affordability issues in smaller markets outside Vancouver, surpassing even Vancouver's 1.2 years increase. This metric underscores the daunting financial burden imposed by housing costs.
Toronto ranks as the second least affordable market in Canada and 84th out of 94 international markets based on the median multiple. The city's affordability worsened from a pre-pandemic median multiple of 8.6 to 9.3 post-pandemic, indicating a significant rise in housing costs relative to income.
The middle class globally faces an existential threat due to rising housing costs outpacing income growth. Historical data indicates that house prices once aligned with household incomes, but now they often exceed three times median household incomes in major markets like New Zealand, Canada, the US, Australia, the UK, and Ireland.
Urban containment policies like green belts and growth boundaries, aimed at curbing urban sprawl, inadvertently drive up land prices in existing urban areas. This exacerbates housing affordability issues by limiting supply and increasing demand, driven partly by speculative investments.
Listen on Apple Podcasts:
 | A guest post by
|
Thank you again for a very informative podcast! As always it is bursting with information....so much so that I have to listen to it twice. There is a statement that you made which however puzzles me. It is as follows". Policies like the Greenbelt in Ontario contribute to high land and house prices by limiting development making it difficult for middle income households to afford housing." I live in Caledon...Greenbelt country. It is my observation that a goodly number of the houses recently built in Caledon are monster homes. Certainly nothing for the average middle-class person. That is why developers like Caledon...for the lucrative custom home market. Subdivisions have cropped up, some successful and some not. Cheltham,,...100 acres in town were levelled . Roads, streetlamps, transformer boxes were all put in. That was over 5 years ago. Now it sits empty. Alton...same deal.( Rumour was that they had water issues). Finally, after many years, they started building monster homes. Caledon East ...home construction seems to be running into a problem...no middle class buyers. The Greenbelt comes with its own construction problems which would certainly not make building cheaper. The cost for the infrastructure is a big issue leading to massive tax increases ( nothing for your middle class here). Paving over the Greenbelt would also lead to environmental issues, such as flooding. Instead of pointing the blame of the lack affordability on limited Greenbelt development, there are other factors at play...take development fees levelled by the governments themselves. Urban sprawl and the traffic gridlock which ensues are also not sustainable. We have to change our trajectory of thought to build better, affordable housing . Europe seems to be doing well in this.
Just my two cents worth...
Cheers,
Tamara