Posthaste: It's more expensive to live in Mississauga than LA or Chicago, study finds
Only New York is more expensive
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Good Morning!
Here’s a cheery bit of news on a Monday morning for Canadians already fretting about rising prices.
Canadian insurance provider PolicyAdvisor analyzed the 10 biggest cities by population in Canada and the United States for affordability and came up with some surprising findings.
Granted, the points of comparison are unique. The study researched the average cost of a basket of eight expenses in each of the cities: rent, a one-way ticket and a monthly ticket on public transport, a meal out, a movie ticket, a bottle of water, a cappuccino and one month of gym membership.
The combined cost of these was then calculated as a percentage of the average monthly salary in the cities to determine their affordability.
New York City comes out on top — no big surprise there. The Big Apple might have the second highest average monthly salary at US$6,359.51 a month (San Jose is highest at US$7,798.49), but it also has the highest rents at an average of US$3,381.88. Gym memberships, transportation and the cost of a meal, even at the cheapest restaurants, are also the most expensive in both countries. At US$4.95 a pop you can get the second most expensive cappuccino in North America, same for a bottle of water at US$2.21. The combined cost of the eight items in the basket take up 57% of the average salary.
Then things get a bit surprising.
Mississauga, Ontario, ranks as the second most expensive city, beating out Los Angeles and Chicago. Rents at US$1,626.77 are high but not as high as Toronto, Vancouver or many of the major U.S. cities including Dallas. However, average incomes are lower in Mississauga at US$3,202.38 a month, the study’s fourth lowest after Hamilton, Montreal and Winnipeg.
Public Transport is also pricey with a monthly pass costing US$111.30, third most expensive after New York City (US$129.5) and Toronto (US$120). In Mississauga the total cost of the basket takes up 56.4% of the average monthly income, pretty close to New York.
In fact, Canadian cities dominate the top 5 of the affordability study. Mississauga is followed by Vancouver, Hamilton and Toronto as the next most expensive.
Vancouver has only the eighth most expensive rent at US$1,731.50 and ranks about average in the other metrics, but its salaries are lower than other cities, averaging US$3,804.53 per month. The basket takes up 50% of the average salary.
In Hamilton the average rent is US$1,236.9, but the average salary is just US$2937.85 per month, the third lowest in the ranking.
Coming in fifth is Toronto, the third most populated city in the study, with the second highest monthly transport costs at US$120.60. The basket of items here take 46.7% of the average monthly earnings of US$3,947.43.
Los Angeles, San Diego, Chicago, Ottawa and Montreal finish off the top 10.
Calgary is the ranking’s most affordable. With an average salary of US$4,215.60, the city also boasts among the cheapest rents at US$1,051.46.
But then Canadians don’t need a study to tell them how expensive the cost of living is getting as inflation rates climb to near 40-year highs in this country.
The costs of living was cited as the most pressing issue by 63% of Canadians in a recent poll by Angus Reid, ahead of health care, housing affordability, climate change and jobs.
Just under half (45 per cent) said they were financially worse off than a year ago, the highest level in at least 12 years. A third of respondents expect to be worse off a year from now, the highest number in more than a decade.
Canadian home buyers also now face the most unaffordable housing market in a generation, says another report.
RBC’s aggregate affordability measure for Canada soared 3.7 percentage points to 54% in the first quarter of 2022, the worst level since the early 1990s, said RBC economist Robert Hogue.
And that’s likely to get worse before it gets better, Hogue said, with the Bank of Canada’s aggressive rate hiking expected to raise the costs of owning a home even higher.
There is relief on the horizon, however. Hogue said home prices, which are already declining, are likely to fall more than 10% in the coming year.
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BANKING ON IT Canadians’ faith in the Bank of Canada to tackle inflation is shaky, a poll on Friday suggests. Almost half of Canadians polled by the Angus Reid Institute said they trust the Bank of Canada to fulfill its mandate adequately, but almost the same number, 41 per cent, disagreed. The mistrust appears to run along political lines.
Almost 60 per cent of Conservative supporters and 86 per cent of People’s Party of Canada supporters lacked confidence in the central bank.
Conservative leadership candidate Pierre Poilievre, seen above holding a press conference outside the Bank of Canada in April, has been highly critical of the Bank, going so far as to pledge to fire governor Tiff Macklem if he became prime minister. Photo by Justin Tang/The Canadian Press
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Today’s Posthaste was written by Pamela Heaven (@pamheaven), with files from The Canadian Press, Thomson Reuters and Bloomberg.
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