01/21/2014 05:13 EST | Updated 03/23/2014 05:59 EDT

Vancouver's housing 2nd least affordable in world

Vancouver is ranked second only to Hong Kong in housing affordability according to Demographia's 10th annual survey of 360 housing markets in nine western countries.

The survey divided median housing prices in Australia, Canada, Hong Kong, Ireland, Japan, New Zealand, Singapore, the U.K. and the U.S. against median gross household income to come up with its ratings.

Under this system, homes in Vancouver cost 10 times median income compared to 15 times income in Hong Kong. Three times median income is considered affordable. 

Canada's major metropolitan markets all have a rating of "severely unaffordable" and the report listed Canadian housing as the most overvalued among 20 OECD nations. 

In addition to Vancouver, the three least  affordable metropolitan markets in Canada were all in British Columbia: Victoria, Kelowna and the Fraser Valley.

The country's most affordable markets were Moncton and St John, New Brunswick.

However, when major markets are excluded,  Canada's overall housing was rated only "moderately unaffordable" outperforming Australia, New Zealand, Hong Kong and the U.K. where housing prices were all higher. 

"Housing affordability is an important determinant of the standard of living, because higher cost housing leaves less discretionary income," says the report. "Severely unaffordable markets are also more attractive to buyers seeking extraordinary returns on investment."

The report cites London, Vancouver and the U.S. west coast as prime examples of this trend.

The study also cited a recent Royal Bank of Canada report. 

"Detached housing, which is preferred in Canada," it says, "now requires more than 80 percent of median household income, two-and-a-half  times the 32 percent recommended by Canada Mortgage and Housing for mortgage eligibility."