How Does Australia’s Housing Affordability Compare Internationally?

To most Australians it comes as a surprise that two of our five capital cities rank within the top 10 least affordable cities in the world.

According to the 2017 Annual Demographia International Housing Affordability Survey, Sydney has the second least affordable housing market in the world, behind Hong Kong. And Melbourne comes in at number six on the least affordable housing least. For international HR managers and relocation industry experts, the effects this can have on employee rental allowances are quite significant.

The top ten cities with the least affordable housing markets are:

  1. Hong Kong, China
  2. Sydney, Australia
  3. Vancouver, Canada
  4. Auckland, New Zealand
  5. San Jose, America
  6. Melbourne, Australia
  7. Honolulu, America
  8. Los Angeles, America
  9. San Francisco, America
  10. Bournemouth and Dorset, United Kingdom

Melbourne is ranked firth least affordable, Adelaide 16th, Brisbane 18th and Perth 20th.  The impact this has on everyday Australians may be enormous as discretionary income is reduced and standards of living is impacted negatively. Ownership for first home buyers are getting more and more out of reach.

On a national scale, Australia is also one of the countries with the most unaffordable property, coming in at number three behind Hong Kong, which has a median multiple of 18.1, and New Zealand with a median multiple of 5.9.

The top countries with the least affordable housing markets are:

  1. Hong Kong (median multiple of 18.1)
  2. New Zealand (median multiple of 5.9)
  3. Australia (median multiple of 5.5)
  4. Singapore (median multiple of 4.8)
  5. United Kingdom (median multiple of 4.6)
  6. Japan (median multiple of 4.1)
  7. Canada (median multiple of 3.9)
  8. America (median multiple of 3.6)
  9. Ireland (median multiple of 3.4)

The medium multiple is calculated is by dividing the median house price by the median household income. A score of 3 points and under is considered affordable while a score of 5.1 and over is considered severely unaffordable.

The 2017 Annual Demographia International Housing Affordability Survey assessesed 406 urban markets in nine countries: Australia, Canada, Hong Kong, Ireland, Japan, New Zealand, Singapore, United Kingdom, and the United States as at the third quarter of 2016.

This property value snapshot has been created to assist our clients in making informed relocation decisions, particularly those related to rental allowances. We believe that accurate, actionable property data and rental market information enables our clients to make informed decisions that cater to the housing requirements of their employees, whilst simultaneously ensuring financial best practice.