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Canada beats out the US for the most liveable cities in North America – but can you afford to live there?

If you’re looking for the best place to live, you might have to look outside the U.S.

No American cities ranked in the top 10 of the Global Liveability Ranking, a yearly assessment published by the Economist Intelligence Unit (EIU), the Economist’s sister company. The survey ranks 172 cities (previously 140) for their urban quality of life based on factors such as health care and political stability.

No North American cities managed to break the top three with those spots going to Vienna, Copenhagen and Zurich. Three major Canadian cities — Calgary, Toronto and Vancouver — were listed within the top 10.

The survey also breaks down their rankings to look at the best cities in regions, like North America.

Atlanta is the U.S.’s No. 1 city, ranking fifth in North America. Notably, Los Angeles has moved up the ranks to take the 37 spot and Houston took a tumble down the list coming in at 87 this year. Four out of the top five North American cities to live in are in Canada, with Calgary, Alberta ranked as No. 1, followed by Vancouver, Toronto and Montreal.

However, if you’re considering a move up north, know that “liveable” doesn’t necessarily mean it’s going to be cheaper to live there.

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What makes a city liveable?

More than 30 factors related to education, culture, the environment, health care, infrastructure and stability were analyzed. The index’s authors also explained that top cities were chosen by how they rebounded from the pandemic in addition to factoring in stability, good infrastructure and services and enjoyable leisure activities.

“Western European and Canadian cities dominate the top of our rankings,” the report said, citing how everyday life is “almost back to normal in these cities” after achieving high COVID-19 vaccination rates and ending lockdowns. In terms of the U.S.’s presence on the list, Houston was one of the biggest risers in the early 2021 survey after an early lifting of covid restrictions. However, as other cities followed suit, Houston fell 25 spots in the 2022 rankings.

High ranking in spite of the housing affordability problem?

When publishing our report for the five best Canadian cities for housing affordability and job growth, none of the EIU’s picks made the list.

While the large urban hubs — like Vancouver, Toronto, and Montreal — offer the most lucrative jobs and career options, they also have some of the most expensive real estate in the nation.

A July 20 Leger survey, commissioned by RE/MAX, revealed that about 64% of Canadians list relocation among the top sacrifices they’d be willing to make to buy affordable homes.

The survey also found that 43% said the high price of real estate in their area was a barrier to entry into the market. Other hurdles include a higher cost of living (35%); a shortfall in salary (24%); market volatility (24%), and rising interest rates (24%).

This explains why the Canadian federal government is providing $1.5 billion Canadian ($1.1 billion U.S.) to extend the Rapid Housing Initiative and create at least 6,000 additional affordable housing units across Canada.

Is there hope with Calgary and Montreal?

When looking at benchmark real estate prices, both Calgary and Montreal are significantly more affordable when compared to Toronto and Vancouver, where prices for a detached home start at around $1 million.

In Montreal, the average home price reached $576,760 in July after a 6% annual increase. The highly-coveted detached homes for Canadian families saw their prices increase by 10% year-over-year to reach $550,000 in Montreal, and a median condo’s average price increased by 9% year-over-year to $392,000.

So how about income? According to Statistics Canada, the average income in Montreal for 2020 is $49,600. This is lower than Canada’s national average, of $51,300 in 2020.

Calgary’s benchmark price of real estate reached $581,600 in July, going up 13% higher than levels reported last year. Detached homes in Calgary rose by 9% year-over-year to reach about $637,000 in July, and condos went up 6% to hit $275,000.

Calgary’s average income, meanwhile, is above the national average at $58,500 in 2020.

The issue of income vs housing prices

Vancouver’s benchmark price for detached homes is more than $2 million, representing a 13.4% increase from June 2021. Condo prices in Vancouver rose by 11.4% from July last year to hit a benchmark price of CA$755,000 (roughly $600,000).

With Vancouver’s real estate market being so expensive, one would expect the average income to be higher or even higher than Calgary’s, right?

Not exactly. According to Statistics Canada, the average income in Vancouver equals the national average at $52,600.

For Toronto, the average selling price is about $1.5 million, which remained 5.3% above the June 2021 level. The Greater Toronto Area’s prices for detached homes in July averaged about $1.4 million, semi-detached were about CA$1 million, and condo apartments were about $719,237.

Toronto’s average income too isn’t that much higher than the national average. For 2020, Torontians on average earned $52,700.

For many Americans and Canadians, seeing their country’s home prices outgrowing its income isn’t breaking news.

While all G7 countries have seen their house price-to-income ratio rise over the past year, Canada has one of the highest house price-to-income ratios out of 38 developed countries, according to the latest index from the Organisation for Economic Co-operation and Development.

In the fourth quarter of 2021, the ratio index reached a whopping 141.9, meaning, home prices surged at a rate 41.9% faster than incomes since 2015, OECD’s data showed. Meanwhile, the U.S. ratio index was 130.5 in Q4 2021.

What makes Toronto and Vancouver so expensive?

Last year, Ontario received half of all the newcomers to Canada, with the majority aiming to settle in Toronto where all the lucrative job opportunities are.

Known for its picturesque beauty, metro Vancouver also attracts lots of immigrants. It is expected that population growth in British Columbia will once again be driven by immigration this year, when it will welcome a record of more than 70,000 permanent residents.

“Our region continues to grow because we attract people and businesses from all around the world,” said Toronto Regional Real Estate Board CEO John DiMichele in July.

DiMichele also urged policymakers at all levels to build more homes as “housing demand” will “remain strong over the long term.”

Source : Yahoo Finance