MONTREAL – For the first time in years, Montreal-area homes have become less affordable than houses in greater Toronto, according to a survey by the Frontier Centre for Public Policy.

Montreal is ranked as Canada’s second least affordable housing market with one million inhabitants or more – right after Vancouver – says the survey published this week by the conservative, Prairies-based think tank.

The survey results are based on data from the third quarter of 2010. To rate housing affordability, survey authors took the median multiple – median housing price divided by gross annual median household income – in 325 markets in Australia, Canada, Hong Kong, Ireland, New Zealand, the United Kingdom and the United States.

Affordable cities have median multiples of about 3.0 – where median house prices are three or less times median household incomes.

Montreal was listed as a “severely unaffordable” market with a median multiple of 5.2, compared with 5.1 for Toronto. The report illustrates how Montreal salaries have failed to keep up with home prices: Four years ago, the survey ranked Montreal as moderately unaffordable, with a multiple of 3.8 and a ranking just ahead of St. Catharines, Ont.

Yet despite the steady appreciation of Montreal housing prices – even through the recent global economic crisis – other analysts haven’t assessed city housing prices as being less affordable than those in Toronto.

While RBC senior economist Robert Hogue wouldn’t comment on the Frontier Centre’s survey, he said the latest affordability index he authored found Montreal to be more affordable than Toronto in most housing categories.

“In most cases, Toronto would be more expensive and less affordable than Montreal – except for maybe condos,” Hogue said.

alampert@montrealgazette.com