‘Severely unaffordable’. Australia’s housing market amongst the most expensive in the world

If you’ve been feeling the pinch of the purse strings, you’re not alone. It turns out all five of Australia’s most popular housing markets are positioned within the most unaffordable in the world.

The 16th annual Demographia International Housing Affordability Survey, which ranks 309 urban markets across eight countries, found that the only places more expensive to live than our major cities are Hong Kong and Vancouver.

The survey ranks houses by median multiple (house price divided by income) with a rank of three and under classified as ‘affordable’, while 3.1-4 is ‘moderately unaffordable’, 4.1-5.0 ‘seriously unaffordable’ and anything classified as 5.1 and over was characterised as ‘severely unaffordable’.

Sydney, Melbourne, Adelaide, Brisbane and Perth were all ranked over 6.0 and classified as ‘severely unaffordable’. Other Australian regions to make the top 50 on the list were the Gold Coast, Geelong, Hobart, Fraser Coast, Canberra and Ballarat.

Hong Kong has held firm in the least affordable spot for the ninth year in a row, while Sydney dropped one spot to third place this year, having been surpassed by Vancouver. Melbourne came in at the fourth least-affordable city. New Zealand’s Taraunga-Western Bay of Plenty, Los Angeles, Toronto, Auckland, San Jose were all within the top 10 least affordable markets.

“Despite what has been called the largest Sydney price reduction in 35 years, house prices relative to incomes are more than double the rate of the early 1980s,” report authors Wendell Cox and Hugh Pavletich said.

“In Sydney and Melbourne, median income households need at least three years’ more income to pay for the median-priced house than in 2004, when the first Demographia Survey was published.”

Gladstone was the only Australian housing market which was classified as ‘affordable’ according to the survey, placing as the 29th most affordable city. The overall winner was Fort MacMurray in Canada, closely followed by Peoria and Davenport in the United States.

Top 10 least affordable markets

1. Hong Kong
2. Vancouver, BC
3. Sydney, NSW
4. Melbourne, VIC
5. Los Angeles, CA
6. Toronto, ON
7. Auckland
8. San Jose, CA
9. San Francisco, CA
10. London

Top 10 most affordable markets

1. Fort MacMurray, Canada
2. Peoria, US
3. Davenport, US
4. Rockford, US
5. Utica-Rome, US
6. Akron, US
7. Fredericton, Canada
8. McAllen, US
9. Saint John, Canada
10. Syracuse, US