A global housing affordability report has ranked Australian cities amongst the most unaffordable in the world.
According to the 10th Annual Demographia International Housing Affordability Survey Australia not only had the highest number of housing markets ranked as “severely unaffordable” in 2014, it was also one of just two countries in which each of its major markets had been ranked as severely unaffordable since the survey began – the other country being New Zealand.
“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,” said the report.
The survey ranks cities in Australia, Canada, Hong Kong, Ireland, Japan, New Zealand, Singapore, the UK and US on a decimal scale, with cities that generate a "median multiple" between 4.1 and 5 deemed “seriously unaffordable: and anything over 5.1 as “severely unaffordable”.
Overall, Australia had 25 severely unaffordable markets and 14 seriously unaffordable markets. None of Australia’s property markets was deemed moderately affordable or affordable.
Sydney and Melbourne made the list of the least affordable markets worldwide, coming in at 4th
“Among all markets, Australia's Median Multiple remained at a severely unaffordable 5.8. After major markets Sydney (9.0) and Melbourne (8.4). Port Macquarie
(NSW) was third most unaffordable, at 8.1, followed by the Sunshine Coast (QLD), at 8.0 and the Gold Coast (QLD) at 7.7.”
During the 1980s Australia’s major markets (with the exception of Sydney) could be classed as “moderately affordable”. This changed with the widespread adoption of urban containment policies, or “urban consolidation”, said the report.
Karratha in WA was Australia’s most affordable market, with a rating of 4.1, although this still falls just within the “seriously unaffordable” range.