01/22/2013 11:47 EST | Updated 01/25/2014 04:01 EST

Vancouver Housing Affordability 2nd Worst In World: Demographia

Vancouver is the second least affordable city in the world when it comes to housing, according to a U.S. think-tank.

Demographia ranked the B.C. city second only to Hong Kong on housing affordability, although it is getting better on Canada's West Coast.

Demographia measures affordability using the "Median Multiple," which multiples the median house price in a given market by its median household income.

Vancouver's median multiple rated 9.5, meaning the median house price was about 9.5 times higher than the city's median household income, placing it in the "Severely Unaffordable" range. That was down from a multiple of 10.6 in Demographia's 2011 survey.

Hong Kong's median multiple was 13.5 while Sydney, Australia's was 8.3. Toronto's median multiple went up to 5.9 from 5.1. That places Toronto in the "severely unaffordable" category as well.

Demographia blamed the lack of housing affordability on "urban containment regulation," meaning city policies such as "smart growth" or "densification."

The think-tank said that such policies "severely ration" land for development, which leads to higher land and house prices.

The news comes as Vancouver's housing market deals with a glut of bad news. Vancouver housing starts dropped to 14,722 units in December 2012, down from 15,056 a year earlier.

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