Australian housing among the world’s most unaffordable
17 February 2017
A report last month by Demographia showed that Australian housing remains among the most unaffordable in the world, with millions of workers and young people priced out by soaring housing costs. Of the 51 Australian housing markets assessed in the international survey, 33 were deemed severely unaffordable.
The report examined some 400 housing markets across nine countries, using the Median Multiple (MM) formula, obtained by dividing the median house price by the median annual household income. The MM system classifies housing markets as affordable if they score under 3.0. Results of 3.1 to 4.0 are deemed unaffordable, 4.1 to 5.0 seriously unaffordable and over 5.0 severely unaffordable.
Nationally, the Australian housing market scored 5.5. Sydney, the country’s largest population centre, is the second most unaffordable major city in the world, with a MM of 12.2, the same result as 2016 and up from 9.8 in 2015. That means it would take 12.2 years, on a median income, to earn the money to buy a median-priced house.
Sydney placed behind Hong Kong (18.1) and ahead of Vancouver (11.8) and Auckland (10.0). Sydney house prices are far less affordable than global cities such as London, with an MM of 8.5, and New York, which scored 5.7.
The current median house price in Sydney is $1,077,000, compared with $1,032,000 in 2016 and just over half a million dollars a decade ago.
The figure for Melbourne, Australia’s second largest city, was 9.5, down slightly from last year, but up from 8.7 in 2015. Like Sydney, it was more unaffordable than Los Angeles, Honolulu and San Francisco. The median house price for Melbourne currently stands at $740,000.
The housing affordability crisis is not…