Housing affordability in Australia is always a hot topic but how do we compare with the rest of the world? The 16th Annual Demographia International Housing Affordability Survey crunched the numbers on 309 housing markets in metropolitan areas in eight countries (Australia, Canada, China [Hong Kong Only], Ireland, New Zealand, Singapore, the United Kingdom and the United States). It used something called a “Median Multiple” – which is the median house price divided by the median household income – to rate housing affordability.
The ratings are as follows:
Affordable: 3.0 and under
Moderately unaffordable: 3.1-4.0
Seriously unaffordable: 4.1-5.0
Severely unaffordable: 5.1 and over
Demographia also broke down the list to 92 “major” housing markets. The survey found that even though there has been moderation of house price increases in some of the least affordable major markets over the past year it wasn’t enough to really improve housing affordability.
It found that only Singapore and Ireland do not have severely unaffordable major markets and that for the sixth year in a row, the United States has the most affordable housing costs among major housing markets.
The 10 least affordable major cities around the world
So which major markets are the least affordable around the world? Spoiler alert: two Australian cities feature on the list. In both those cities 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.
Let’s count back from 10…
10. London, UK
Median multiple: 8.2
Median price: £470,000 ($925,404)
Median household income: £57,300 ($112,794)
9. San Francisco, USA
Median multiple: 8.4
Median price: $US950,000 ($1,438,979)
Median household income: $US113,700 ($172,230)
8. San Jose, USA
Median multiple: 8.5
Median price: $US1,120,000 ($1,696,419)
Median household income: $US131,400 ($199,015)
Equal 6. Auckland, New Zealand
Median multiple: 8.6
Median price: $NZ830,000 ($794,145)
Median household income: $NZ96,000 ($91,860)
Equal 6. Toronto, Canada
Median multiple: 8.6
Median price: $C726,000 ($828,091)
Median household income: $C84,800 ($96,725)
5. Los Angeles, USA
Median multiple: 9.0
Median price: $US687,000 ($1,040,467)
Median household income: $US76,500 ($115,869)
4. Melbourne, Australia
Median multiple: 9.5
Median price: $843,000
Median household income: $88,700
3. Sydney, Australia
Median multiple: 11.0
Median price: $1,080,000
Median household income: $97,900
2. Vancouver, Canada
Median multiple: 11.9
Median price: $C905,000 ($1,032,435)
Median household income: $C75,800 ($86,474)
1. Hong Kong, China
Median multiple: 20.8
Median price: $HK7,040,000 ($1,368,978)
Median household income: $HK338,000 ($65,726)
What about the rest of Australia?
It probably didn’t surprise many people that Sydney and Melbourne are very unaffordable but where do other cities rank? Of the 23 Australian locations that were considered in the survey 14 were rated as “severely unaffordable” as they had a median multiple of 5.1 and over. The Sunshine Coast (8.4) and Gold Coast (8.0) were close behind Sydney and Melbourne as least affordable.
Five areas fell into the “seriously unaffordable” range, three were “moderately unaffordable” and only one was considered “affordable” – Gladstone in Queensland. The table below shows the results for all the locations considered.
| International Affordability Rank | National Rank | Housing market | Rating | Median price | Median household income |
| 276 | 17 | Adelaide, SA | Severely unaffordable (6.9) | $472,000 | $68,600 |
| 217 | 8 | Albury-Wodonga, NSW-VIC | Seriously unaffordable (4.8) | $332,000 | $69,800 |
| 174 | 5 | Alice Springs, NT | Seriously unaffordable (4.2) | $455,000 | $107,200 |
| 261 | 12 | Ballarat, VIC | Severely unaffordable (6.0) | $397,000 | $66,600 |
| 242 | 11 | Bendigo, VIC | Severely unaffordable (5.4) | $358,000 | $66,700 |
| 266 | 14 | Brisbane, QLD | Severely unaffordable (6.3) | $546,000 | $86,700 |
| 217 | 8 | Bundaberg, QLD | Seriously unaffordable (4.8) | $265,000 | $55,100 |
| 239 | 10 | Cairns, QLD | Severely unaffordable (5.3) | $397,000 | $74,300 |
| 266 | 14 | Canberra, ACT | Severely unaffordable (6.3) | $692,000 | $109,800 |
| 130 | 3 | Darwin, NT | Moderately unaffordable (3.8) | $460,000 | $120,500 |
| 269 | 16 | Fraser Coast, QLD | Severely unaffordable (6.5) | $326,000 | $50,300 |
| 286 | 19 | Geelong, VIC | Severely unaffordable (7.4) | $551,000 | $74,100 |
| 29 | 1 | Gladstone, QLD | Affordable (2.8) | $261,000 | $93,800 |
| 292 | 20 | Gold Coast, QLD | Severely unaffordable (8.0) | $625,000 | $77,700 |
| 279 | 18 | Hobart, TAS | Severely unaffordable (7.0) | $497,000 | $71,000 |
| 197 | 6 | Mackay, QLD | Seriously unaffordable (4.5) | $358,000 | $80,400 |
| 306 | 22 | Melbourne, VIC | Severely unaffordable (9.5) | $843,000 | $88,700 |
| 261 | 12 | Perth, WA | Severely unaffordable (6.0) | $504,000 | $84,600 |
| 103 | 2 | Rockhampton, QLD | Moderately unaffordable (3.5) | $257,000 | $72,700 |
| 296 | 21 | Sunshine Coast, QLD | Severely unaffordable (8.4) | $593,000 | $70,200 |
| 307 | 20 | Sydney, NSW | Severely unaffordable (11.0) | $1,080,000 | $97,900 |
| 206 | 7 | Toowoomba, QLD | Seriously unaffordable (4.6) | $335,000 | $72,400 |
| 147 | 4 | Townsville, QLD | Moderately unaffordable (3.9) | $310,000 | $80,000 |
| Listed in alphabetical order. Source: 16th annual Demographia International Housing Affordability Study. | |||||
Main image source: Ivan Kruk (Shutterstock)
Currency conversions as of 26 February, 2020.
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