Rate cuts have yet to ease affordability

by Adam Smith22 Jan 2013

A year of declining interest rates has done little to ease Australia's affordability issues, according to a global study.

The Demographia International Housing Affordability Survey has again ranked Australia as one of the most unaffordable housing markets in the world. The survey found the median house price in Australia's major metropolitan markets was 6.5 times median income. The result puts Australia behind only Hong Kong and New Zealand in the group's measure of unaffordability.
Sydney again ranked as the third most unaffordable city, behind Hong Kong and Vancouver, with median house prices 8.3 times median incomes.
On a whole, Australia had 30 housing markets ranked by Demographia as "severely unaffordable", with none ranked affordable. The Demographia survey defines affordable markets as those where median house prices are three times or below median incomes.
The country joins New Zealand, the United Kingdom and Hong Kong and New Zealand among the list of countries with no markets deemed affordable. The Demographia study concluded that those countries and metropolitan areas with severely unaffordable markets shared the trait of more restrictive land use policies.