Jonathan Chancellor | 21 January 2013

Sydney third most expensive property market in the world: Demographia

Australia still has among the most unaffordable housing markets in the world, according to the 9th Demographia International Housing Affordability Survey. It ranked third to Hong Kong and Canada.

The last time Australia’s housing markets were classified affordable was back in the 1980s with no affordable locations found this time among the 39 chosen Australian locations.

Even regional locations were dubbed as unaffordable including Port Macquarie, Coffs Harbour, the Sunshine Coast, Shepparton and Mildura, according to the US-based property forum.

The ninth annual survey by Demographia's Wendell Cox places Sydney as the third most expensive major housing market in the world - with a median multiple of 8.3 topped by Vancouver in Canada at a multiple of 9.5, and, most expensive, Hong Kong where the multiple sits at 13.5.

There are 337 locations in the international survey.

Some 30 of the 39 Australian locations are classified as severely unaffordable

Melbourne is ranked as the seventh most unaffordable housing major market with a multiple of 7.5 after London and San Francisco and San Jose in California in the USA.

A multiple of three or less is deemed affordable.

Australia's major market housing affordability did improve a touch over the past year from a median multiple of 6.7 to 6.5.

"Rising incomes and flat or declining house prices improved the median multiples in Australia's major markets. However each of the five major markets continues to be severely unaffordable, reflecting vastly overpriced housing," said the report.

"Sydney is the least affordable, with a median multiple of 8.3. Melbourne has a median multiple of 7.5, Adelaide 6.5, Perth 5.9 and Brisbane 5.8."

The Demographia survey ranks the affordability by dividing the median house price with the median household gross annual income before tax.

Its conclusions, given they are based on ABS data on housing and wages that's not wholely inclusive, are taken with a grain of salt by many Australian property commentators.

 




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