The Chapman University Frontier Centre for Public Policy has released its latest global housing affordability index in June 2024, which assesses housing affordability in 94 major markets across eight nations: Australia, Canada, China, Ireland, New Zealand, Singapore, the United Kingdom and the United States.

The 2024 Demographia International Housing Affordability report identified a housing affordability crisis impacting the middle class, driven by escalating housing costs that outpace income growth.

From data collected in the third quarter of 2023, the latest report used a median price-to-income ratio (“median multiple”) to determine middle-income housing affordability. The reported noted that a well-functioning market, median priced houses should be affordable to middle-income households.

Housing markets have been previously rated across four affordability categories based on the median multiple, ranging from the most affordable (“affordable”) to the least affordable (“severely unaffordable”).

In a first for the study’s 20-year history, an “impossibly unaffordable” rating was added as a fifth housing affordability category, for markets with a median multiple triple or more the “affordable” standard.

The highest 25% of least affordable housing markets included Australia, China, New Zealand, the United Kingdom and the United States. Five Australian capital cities – Adelaide, Melbourne, Perth, Sydney and Brisbane – were ranked in the top 20 most unaffordable.

In the geographies ranked as most affordable in the report, nine of the top 10 cities were located in the United States and one in Canada.

Home ownership rates varied significantly across the geographies covered by the report. The highest home ownership rates are in Singapore (89%), Ireland (70%), Canada (67%), Australia and the United States (66%), New Zealand (65%) and the United Kingdom (63%). Hong Kong has the lowest home ownership rate (51%).

Top 20 most unaffordable housing markets

  1. Hong Kong (China)
  2. Sydney, New South Wales (Australia)
  3. Vancouver, British Colombia (United States)
  4. San Jose, California (United States)
  5. Los Angeles, California (United States)
  6. Honolulu, Hawaii (United States)
  7. Melbourne, Victoria (Australia)
  8. San Francisco, California (United States)
  9. Adelaide, South Australia (Australia)
  10. San Diego, California (United States)
  11. Toronto, Ontario (Canada)
  12. Auckland (New Zealand)
  13. Miami, Florida (United States)
  14. Greater London (United Kingdom)
  15. Brisbane, Queensland (Australia)
  16. Bournemouth and Dorset (United Kingdom)
  17. New York, Tri-State Area (United States)
  18. Bristol and Bath (United Kingdom)
  19. Boston, Massachusetts and New Hampshire (United States)
  20. Perth, Western Australia (Australia)

Australian housing affordability – buying and renting property

The Demographia International Housing Affordability report found that none of the major housing markets in Australia were affordable. Sydney (2nd), Melbourne (7th) and Adelaide (9th) were ranked as “impossibly unaffordable”, while Brisbane (15th) and Perth (20th) were assessed as “severely unaffordable”.

According to the report, all five of Australia’s major housing markets have been “severely unaffordable” since the early 2000s or before.

A recent ABC news article on Australian property prices reported that: “Decades of rising property prices have now pushed some city dwellers on a median income out of the property market altogether.” Using the scenario of the nation’s most expensive capital city, a median income household in Sydney looking to buy a median-priced property would need to spend around 60% of their gross income to service the mortgage.

Unaffordable property prices, population growth, overwhelming demand, lack of housing supply and low numbers of new dwellings being built are collectively putting extreme pressure on renters and the rental market, particularly for low income earners.

The situation is worsened by the fact that more households with higher incomes are now also needing to rent rather than purchase. According to research published in February 2024 by the Australian Housing and Urban Research (AHURI), nearly a quarter of renters are now from households in top income levels.

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