By Graeme McNaughton/The Oshawa Express
Oshawa, along with much of the country, is becoming a more and more expensive place to afford a home.
That’s according to a new report from Demographia, an Illinois-based urban planning consulting firm, which labels Oshawa as the 10th least affordable city in the country when it comes to house prices.
To compile the rankings, researchers used the median multiple indicator, which divides the median house price in the area by the gross annual median household income before taxes. The higher the number a city gets, the less affordable it is. According to Demographia, a rating of 3.0 and under is considered affordable, 3.1 to 4.0 is moderate, 4.1 to 5.0 is seriously unaffordable and anything over 5.1 is severely unaffordable.
According to the report, Oshawa was rated at a 4.3, putting it alongside Tokyo-Yokohama in Japan, Bakersfield in California and Bunbury in Australia.
Oshawa, however, is following a trend seen in Canada, according to the report, with more major centres moving into unaffordable territory, with all major markets seeing a median multiple indicator of 4.2.
Vancouver, long known for its sky-high real estate prices, came in third worldwide on the Demographia report, receiving a rating of 10.8. The top three are rounded out by Victoria at 6.9 and Toronto at 6.7.
Wendell Cox, the founder of Demographia, tells The Oshawa Express that escalating house prices compared to median incomes is difficult to go back on.
“Things aren’t nearly as bad in places like Barrie or Oshawa as they are in the official Toronto (census metropolitan area), but the basic problem is once you allow this type of cost escalation to occur, it is very difficult to roll it back,” Cox says. “You have the problem that young people aren’t going to be able to afford houses in (the Toronto area) and it’s one of the reasons…you’ll see a huge out-migration from the Toronto (census metropolitan area) to places like Kitchener-Waterloo and so on, and to other provinces. Research in the States is showing a huge correlation between housing affordability and net domestic migration, and the reason for that, of course, is housing represents the largest share of consumer expenditures almost everywhere, so if you’re faced with spending almost double what you used to have to spend, it’s a problem.”
The three most affordable major centres in the country are all out in the Maritimes, with Moncton and Saint John each receiving a 2.3 and Fredericton a 2.4.
Limerick, Ireland was ranked as the most affordable major market in the world with a 1.8, and Hong Kong being the most expensive at 19.0.