Commentary
By Lee Harding

If it feels like housing is getting more unaffordable, it’s because it is.

The Frontier Centre for Public Policy and Chapman University’s Center for Demographics and Policy have released the 2025 edition of the Demographia International Housing Affordability report, authored by Wendell Cox. It confirms what many homebuyers already suspect: affordability is in decline.

The report examines 95 major housing markets across eight countries, using data from the third quarter of 2024. Now in its 21st year, the study reveals a troubling trend: affordability continues to erode, especially in jurisdictions with strict land-use regulations.

Generally, the cost of living is highest where municipal governments impose the greatest restrictions on suburban growth. These “urban containment strategies”—including greenbelts, zoning rules and growth boundaries—are often introduced to curb urban sprawl and promote sustainability. But by limiting the land available for development, they drive up the cost of land and, by extension, housing.

The effects are especially stark in places like the United Kingdom, California, Washington, Oregon, Colorado, New Zealand, Australia and much of Canada—jurisdictions where these growth-limiting policies dominate urban planning.

Joel Kotkin, director of the Chapman University centre and a long-time California resident, calls the consequences “feudalizing.” In the feudal system, peasants owed their fortunes, including housing, to the graces of their overlords.

“[T]he primary victims are young people, minorities and immigrants,” Kotkin writes in the report. “Restrictive housing policies may be packaged as progressive, but in social terms their impact could better be characterized as regressive.”

The same pattern applies to Canada. Even after the economic disruption of the COVID-19 lockdowns, housing affordability remained critically strained. In fact, most major Canadian markets saw a slight worsening.

Demographia measures affordability using the “median multiple”—the ratio of median house price to median household income. This ratio shows how many years of income are needed to buy a home, offering a simple comparison across regions. Around 1990, a home typically cost three times the average income—a ratio still considered affordable. Anything above that lands on a scale of unaffordability, with scores of nine or more deemed “impossibly unaffordable.”

Canada’s national median multiple is 5.4, placing it in the “severely unaffordable” category. That’s worse than the United States at 4.8 (“seriously unaffordable”), and slightly better than the United Kingdom’s 5.6. Canada also trails Ireland at 5.1 and Singapore at 4.2. New Zealand stands at 7.7, Australia at 9.7 and Hong Kong at an extreme 14.4.

Among Canadian cities, only Edmonton, at 3.7, lands in the “moderately unaffordable” range, ranking fifth-best globally. Calgary sits at 4.8, followed by Ottawa-Gatineau (5.0), Montreal (5.8), Toronto (8.4) and Vancouver (11.8), which ranks as the fourth-least affordable city in the world. This marks a sharp change for Toronto, where affordability remained relatively stable with a median multiple below four from 1971 to 2004.

Though designed to increase sustainability, these planning models have significantly reduced land availability and driven home prices out of reach for many. As urbanist Jane Jacobs once said, “If planning helps people, they ought to be better off as a result, not worse off.” The data makes it clear—they aren’t.

Yet despite growing evidence, federal and provincial leaders continue to sidestep the core issue.

“In Canada, policy makers are scrambling to ‘magic wand’ more housing,” writes Frontier Centre president David Leis in the report. “But they continue to mostly ignore the main reason for our dysfunctional, costly housing markets—suburban land use restrictions.”

New planning concepts such as the “15-minute city” may make matters worse. This approach aims to create communities where residents can access work, shops and services within a short walk or bike ride. While appealing in theory, it can further restrict development and intensify affordability pressures.

Another key factor—not addressed in the report—is the role of dual-income households. In competitive markets, housing prices are driven not just by what people earn, but by what they can borrow. As more households rely on two full-time incomes to qualify for mortgages, the market adjusts accordingly, pushing prices higher. This places added pressure on families, especially as governments expand daycare programs and increase taxes to support them, effectively requiring both parents to work just to keep up.

There is, however, a sliver of optimism. The shift toward remote work may ease pressure in high-cost urban centres as more Canadians choose to live in areas with lower housing costs.

Whether governments address the root causes or not, people are already making choices that reflect affordability realities. Increasingly, the heart of a major city is no longer the preferred destination for middle-class Canadians. For many, housing affordability isn’t just an economic issue: it’s about opportunity, stability and the ability to build a future.

Lee Harding is a research fellow with the Frontier Centre for Public Policy.

Key Findings from the Demographia International Housing Affordability 2025 Edition

• The report analyzes housing affordability in 95 major metropolitan markets across eight countries: Australia, Canada, China (Hong Kong), Ireland, New Zealand, Singapore, the United Kingdom, and the United States, using data from the third quarter of 2024.

• In 2024, none of the 95 major markets surveyed were rated "affordable." The majority of markets are now classified as either "severely unaffordable" (40 markets) or "impossibly unaffordable" (12 markets)1.

• Hong Kong remains the least affordable with a median multiple of 14.4.Other "impossibly unaffordable" markets include Sydney, San Jose, Vancouver, Los Angeles, Adelaide, Honolulu, San Francisco, Melbourne, San Diego, Brisbane, and Greater London.

• Housing affordability has deteriorated significantly over the past two decades, driven largely by restrictive land use policies such as greenbelts, urban growth boundaries, rural zoning, and compact city policies.

• These policies, intended to promote density and sustainability, have severely limited land supply, inflating both land and housing costs, particularly harming middle-income households.

• The report identifies an "existential threat" to middle-income homeownership in high-income nations, as house prices have surged to 9–15 times household income in the most unaffordable markets.

• This shift is associated with rising social inequality and reduced prospects for upward mobility, especially affecting young people, minorities, and immigrants. There is a growing trend of "counterurbanization," with middle-income households leaving high-cost markets for more affordable areas, particularly in Canada and the United States. This migration is seen as a response to long-term structural affordability problems.

• No major market in any of the eight surveyed countries was rated "affordable" in 2024.

These findings underscore a global crisis in housing affordability, driven by policy choices that restrict land supply, and highlight the urgent need for reform to restore access to homeownership for middle-income households, said the report authors.