Australia & Hong Kong Housing Markets Most ‘Unaffordable’

The 14th Annual Demographia International Housing Affordability survey was released earlier this week which ranked Australia and Hong Kong’s housing markets as the most unaffordable in the world.

The survey looked at 9 countries and examined 293 housing markets in these countries and compared their 3rd quarter income in 2017 to housing prices in the same quarter.

Median home prices in Hong Kong were more than 19 times the amount of media yearly income, making it the most unaffordable place in the world to live.

This does not come as a surprise as Hong Kong has made it to the top of the list for 8 consecutive years. Last year the median home price in Hong Kong was 18 times the amount of yearly income and the survey shows that prices have continued to increase. Sydney, Australia was ranked second on the list of most unaffordable housing markets with Vancouver, Canada taking the third spot.

Australians would have to take out a mortgage in excess of half a million in order to purchase a home. Australia was ranked in third place in the list of most unaffordable countries in the world, New Zealand took second place and Hong Kong topped the list once again. To purchase a property in New South Wales, it would take an average of $613,000 while Victoria was just a tad lower at $496,800.

In a statement, Dr Donald Bush, the former Governor of the Reserve Bank of New Zealand said

Australia is perhaps the least densely populated major country in the world, but state governments there have contrived to drive land prices in major urban areas to very high levels, with the result that in that country housing in major state capitals has become severely unaffordable

Markets were deemed extremely unaffordable when the median home price was in excess of the median household income by five times. Markets were considered affordable when the median home price was not more than three times the median household income. The survey found only 10 metropolitan markets with a population of over 1 million to be affordable.

Most of these cities were located in the Rust Belt area of the United States. The survey results shows that housing markets in New Zealand, Australia and Canada have gone into a housing bubble and it will be up to their respective governments to address these concerns at the earliest.

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