Australia’s major cities Sydney, Melbourne, Adelaide, Brisbane and Perth are in the least affordable 25 per cent of cities in the list of 94 markets included in an international study on housing affordability.
Sydney has been named as the second-least affordable city for middle-income buyers, trailing only behind Hong Kong.
The report placed Melbourne and Adelaide at seventh and ninth positions respectively. Brisbane and Perth also featured in the least affordable 25 per cent of the 94 cities surveyed.
The report notes that “among the major housing markets covered in this edition, the
least unaffordable housing market in Australia (Perth) is at least 50% more affordable than the most unaffordable market (Sydney).”
Melbourne received a 9.8 ranking, behind Hong Kong on 16.7, Sydney’s 13.8, Vancouver’s 12.3, San Jose’s 11.9 and Los Angeles’ 10.9.
The study said:
“Affordability is disappearing in high-income nations as housing costs now far outpace income growth. The crisis stems principally from land use policies that artificially restrict housing supply, driving up land prices and making home ownership unattainable for many.”
Demographia’s report scrutinises housing markets across the English-speaking world, with data collected from Australia, Canada, Hong Kong, Ireland, New Zealand, Singapore, the United Kingdom, and the United States.
The report employs the “median multiple” metric, which is the ratio of median house prices to median incomes, to compare different markets within and across countries.
The report highlights the alarming trend of diminishing housing affordability, particularly for middle-income households. It suggests that limited affordability threatens to erode the middle class, traditionally marked by the ability to own a home.
Canada’s Vancouver rounded out the top three in the annual housing affordability study conducted by Demographia.
While Australian cities dominated the list of least affordable markets, nine out of the top ten most affordable cities were located in the United States.
The Chapman University Frontier Centre for Public Policy, which produces the Demographia International Housing Affordability Report, underscores the growing disparity in housing affordability. This extensive assessment underscores the challenges faced by middle-income buyers in securing homes, particularly in Australia’s major capitals.
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