Three Aussie cities ranked in top 10 most unaffordable housing markets in world
Australia has been declared the least affordable housing market in the English-speaking world, with three of the nation’s capitals ranked among the 10 most unaffordable global cities.
The annual Demographia study ranked Sydney the second most unaffordable city to buy a home in the world – the 15th time in 16 years the Harbour City has been ranked in the global top three.
Demographia produced the rankings by measuring how property prices compared to incomes across global cities.
Sydney was deemed “impossibly unaffordable” with prices 13.8 times the average income, according to Demographia’s newly released International Housing Affordability report.
Only Hong Kong had a worse ratio of prices to incomes.
Melbourne was ranked the seventh least affordable market in the world, with Adelaide at number nine. Like Sydney, both cities were labelled “impossibly unaffordable”.
Adelaide was the world’s ninth least affordable housing market.
Brisbane was ranked joint 13th, on par with Greater London and Miami.
Across Australia as a whole, prices were an average 9.7 times typical incomes, which was higher than in the US, UK, Canada, Ireland and New Zealand.
Demographia noted that Australian housing affordability had deteriorated markedly in recent years, with the ratio of prices to incomes at 6.9 back in 2019. PropTrack figures showed Aussie property prices have risen by about 40 per cent since 2020.
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All five of Australia’s major housing markets have been severely unaffordable since the early 2000s or before, the report said.
Australia was also one of the countries with the biggest disparity between the most and least affordable markets, indicating rising income inequality.
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Brisbane was considered as unaffordable as London.
The report said there had been a strong association between severely unaffordable housing and net domestic migration in many countries.
It comes as ABS figures showed net overseas migration for the 2023 calendar year was the highest ever in history, at 547,200 people, exceeding the previous record of 433,100 in 2022.
Deteriorating housing affordability was eroding the middle-class, the Demographia report added.
“For decades in the high-income world, a hallmark of a strong middle class was the widespread ability to own a home – house prices generally rose in line with household incomes,” it said.
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“As late as the 1990s, house prices were three times or less than household incomes in most, if not all, the housing markets of New Zealand, Canada, the US, Australia, the UK and Ireland.
Australia had one of the largest price gaps between the most and least affordable houses.
“However, this nexus has been broken in many markets, with house prices escalating far above household incomes (measured by the price to income ratio, or “median multiple”).
“Land prices are now much more expensive, and house prices relative to household incomes have tripled in markets such as San Francisco, Sydney, Vancouver, Honolulu and Auckland.”
MOST UNAFFORDABLE CITIES TO BUY A HOME
1. Hong Kong, China
2. Sydney
3. Vancouver, Canada
4. San Jose, USA
5. Los Angeles, USA
6. Honolulu, USA
7. Melbourne
8. San Francisco, USA
9. Adelaide
10. San Diego, USA
11. Toronto, Canada
12. Auckland, New Zealand
13. Greater London/ Miami/ Brisbane
