Housing affordability continues to slide

By |

Housing affordability continues to deteriorate in Australia, with Sydney and Melbourne ranked among the top five least affordable major housing markets in the world, according to the 14th edition of Demographia International’s annual Housing Affordability Survey

Among the 92 major metropolitan markets surveyed, Sydney was ranked the second least affordable, behind Hong Kong, for the third consecutive year. Third place went to Vancouver, followed by San Jose and Melbourne. 

Demographia rates middle-income housing affordability using a measure called the median multiple. This measure captures the median house price divided by the median household income in a given market. 

To be considered affordable, a market needs to have a housing affordability rating of 3.0 and below. Markets with a rating of 5.1 and over are considered to be severely unaffordable. 

Sydney has a median multiple of 12.9, which means a dwelling costs more than 12 times the average annual household income. Melbourne has a median multiple of 9.9.

Nationally, Australia was ranked the third least affordable country, behind New Zealand and mainland China.

Demographia blames Australia’s strained housing affordability on its urban containment policies, which aims to check the growth of urban sprawl by encouraging greater density in existing housing areas.

“Urban containment policies are often accompanied by costly development impact fee regimes that disproportionately charge the cost of the necessary infrastructure for growth on new house buyers. There is particular concern about the cost increasing impacts of these fees and levies, especially in Australia,” Demographia said. 

Related Stories:
Australia Has The Third Most Expensive Housing Market In The World
Should Negative Gearing Be Abolished?


Can you afford to buy in this suburb? Find out how much you can borrow

Top Suburbs : springwood , tweed heads south , ropes crossing , westbrook , cardiff south


Get help with your investment property

Do you need help finding the right loan for your investment?

When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.

Just fill in a few details below and we'll then arrange for a local Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus an appointment is free.

How soon would you like a mortgage?
What is your Annual Household Income i $
Do you currently own any Investment Properties?
Do you own your own residence?
How much equity do you have in all your current properties?
First Name
Last Name
Where do you live?
What number can we reach you on?
E-mail address
We value your privacy and treat all your information seriously - you can check out our privacy policy here