According to British Columbia Real Estate Association's Chief Economist Cameron Muir, it’s no secret that Vancouver has the highest home prices in the country. He explains that it might be useful to do some scratching just below the surface. The ratio of home prices to household income is a commonly used measure to assess relative housing affordability between cities. Unfortunately, it is a very poor indicator in and of itself. It doesn’t account for variations in interest rates between countries. This can distort relative affordability as lower home prices can mask higher carrying costs. It also ignores the level of diversity of a city’s housing stock, where a median or average home price doesn’t tell us much about the cost of housing in the least expensive twentieth percentile.
View his publication to find out how there's more to affordability than meets the eyes.
Source: British Columbia Real Estate Association www.bcrea.bc.ca