THE 8th Annual Demographia International Housing Affordability Survey, covering 325 metropolitan markets in Australia, Canada, Hong Kong, Ireland, New Zealand, the United Kingdom and the United States, has been released this week.
According to the survey, which measures housing affordability by dividing median house prices by gross annual median household income, Hong Kong, Australia and New Zealand have the least affordable housing markets.
Using the 'median multiple' measure, housing markets are considered "affordable" at or below 3 times gross annual household income, "moderately unaffordable" at or below 4 times income, "seriously unaffordable" at or below 5 times income and "severely unaffordable" when above 5.
Of the 81 major metropolitan markets (those with a population of more than 1,000,000) surveyed, there were 24 affordable major markets, 20 moderately unaffordable major markets, 13 seriously unaffordable major markets and 24 severely unaffordable major markets.
All of the affordable major markets were in the United States while three of the moderately unaffordable markets were in Canada and one in Ireland with the other 16 in the United States.
The severely unaffordable major markets were principally in the United Kingdom (8), the United States (6), and Australia (5). Hong Kong was severely unaffordable and there were three severely unaffordable major markets in Canada and one in New Zealand.
The most affordable major market was Detroit, with a median multiple of 1.4, while Atlanta had a median multiple of 1.9.
Hong Kong was the least affordable major market in the survey with a median multiple of 12.6. This was followed by Vancouver with a median multiple of 10.6 and Sydney (9.2 multiple median).
Melbourne had a median multiple of 8.4, followed by Adelaide (6.7), Brisbane (6.0) and Perth (5.7).
The survey found that compared to last year, Australia's affordability had improved, with the median multiple having declined from 6.1 to 5.6 over the past year. However, the survey stated that "Australia exhibited the worst housing affordability of any national market outside Hong Kong."
Outside the major metropolitan areas, the least expensive markets were Mildura and Shepparton at 4.2, Launceston at 4.5, Bunbury at 4.6, Toowoomba at 4.7, Albury-Wodonga and Canberra at 4.9. However, despite being the most affordable in the country, these markets are still considered "seriously unaffordable" according to the survey.
According to Demographia's ratings report: "The deterioration of housing affordability in many of the markets rated in the Demographia International Housing Affordability Survey is unprecedented based upon the available historical data,"
The report argues that the trend is "strongly related to the implementation of more restrictive land use regulations, especially measures that create scarcity in land for housing thus drive up prices."
Demographia has long advocated against restrictive land use and planning policies and declares on its website that Demographia is "pro-choice with respect to urban development" and that "people should have the freedom to live and work where and how they like."
The 8th Annual Demographia International Housing Affordability Survey is available from the Demographia website at <http://www.demographia.com/>.