‘Severely unaffordable’ market fails to deter buyers

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The Annual Demographia International Housing Affordability Survey has called the country’s housing ‘vastly overpriced’ – but what this actually means is up for debate.

Despite a slight improvement in affordability compared to last year, Demographia classed two thirds of the Australia’s housing market as ‘severely unaffordable’, giving us one of the most unaffordable housing markets in the developed world.

The survey revealed that Sydney is the least affordable, with a median multiple of 8.3, while Melbourne is not far behind with a median multiple of 7.5, Adelaide 6.5, Perth 5.9 and Brisbane 5.8.

The report pointed out that this was a major contrast to 30 years ago. “Each of Australia's major markets, with the exception of Sydney, had housing affordability within the 3.0 median multiple norm during the 1980s, before the widespread adoption of urban containment policies,” the report said.

The report considers any score above 4.0 as ‘seriously unaffordable’, yet not everyone agrees.

Australian Property Monitors chief economist Andrew Wilson told Property Observer yesterday that any measures of unaffordability are patently not affecting the market place in terms of buyer activity and price growth.

“We need to look very carefully at the concept of what is unaffordable ... Does unaffordable mean inability to buy, because in Sydney buyers are up and about?”

Top Suburbs : north lambton , upper kedron , leumeah , trott park , mt colah

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Comments
  • Liam Patterson says on 28/01/2013 11:14:43 AM

    The Demographia survey is flawed. It is produced by a pro-development lobby group whose aim is to remove restrictions on residential development, so it is in their interest to overstate the cost of housing. Their data for Australia in particular has been shown to be incorrect - google 'Demographia Debunked' for more details. Demographia's income data for Australia doesn't match any official sources, and their dwelling price data is also incorrect as they omits the more affordable units/townhouses/semis/terraces from their calculations and only focus on standalone houses. Check the blog below for more details...

    http://australianpropertyforum.com/blog/entry/3174279/8081/

    Cheers,

    Liam Patterson

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