Vancouver Ranked as 4th Least Affordable Major Housing Market Globally
A new report on international housing affordability has once again highlighted Vancouver's challenging housing market. The 2025 edition of the Demographia International Housing Affordability report, authored by Wendell Cox, ranked Vancouver as the 4th least affordable major housing market in the world.
How Affordability is Measured
The report uses a "median multiple" to rate affordability, which is a price-to-income ratio that divides the median house price by the median household income. This metric is a widely accepted standard used by organizations like the World Bank and the OECD to assess housing affordability.
The report categorizes markets based on this median multiple:
- Affordable: 3.0 and under
- Moderately Unaffordable: 3.1 to 4.0
- Seriously Unaffordable: 4.1 to 5.0
- Severely Unaffordable: 5.1 to 8.9
- Impossibly Unaffordable: 9.0 and over
Vancouver's Ranking
With a median multiple of 11.8, Vancouver is classified in the "impossibly unaffordable" category. This makes it the least affordable market in Canada and the 92nd least affordable out of the 95 major markets surveyed internationally. It's more unaffordable than all other markets except for Hong Kong (14.4), Sydney (13.8), and San Jose (12.1).
The report notes that Vancouver has been among the four least affordable major markets in each of the last 18 years. This severe lack of affordability has spread to smaller markets in British Columbia, such as Chilliwack, the Fraser Valley, Kelowna, and Victoria, which have also become significantly less affordable.
The Broader Context and Policy Response
The Demographia report suggests that these high prices are largely due to policies that restrict urban expansion, a concept known as "urban containment" or the "international planning orthodoxy". These policies, which include greenbelts and urban growth boundaries, limit the supply of land for new housing, especially for the detached homes that most people prefer. This scarcity of land drives up land and housing costs, making homeownership unattainable for many middle-income households.
A notable point from the report is its lack of discussion regarding any specific policies from the Vancouver or Canadian governments aimed at combating density. The report critiques Canadian policymakers, stating they are "scrambling to 'magic wand' more housing but continue to mostly ignore the main reason for our dysfunctional costly housing markets—suburban land use restrictions". This suggests that from the report's perspective, the current efforts aren't addressing the core issue of land supply.
In contrast, the report highlights New Zealand's recent government reforms as a positive example. The New Zealand government's "Going for Housing Growth" program plans to open up a considerable amount of land for greenfield development to counteract the effects of urban containment. The report presents this as a potential template for other countries, including Canada, to follow.
This crisis is also causing a trend known as "counterurbanization," where households are moving away from expensive markets like Vancouver to more affordable places. This trend is especially noticeable in Canada and the U.S., with large Canadian markets losing nearly 275,000 domestic migrants between 2019 and 2023.
Looking Ahead
The Demographia report suggests that without significant changes to land-use policies—particularly those restricting suburban expansion—Vancouver’s housing affordability challenges are likely to continue. It also notes a growing trend of “counterurbanization,” where households are relocating from high-cost markets like Vancouver to more affordable regions. This shift could reshape the housing landscape and regional demographics in the coming years.
If you have questions about how these trends might impact the North Shore real estate market or want personalized guidance, feel free to reach out. We’re here to help!.