Most Australian cities found a place among the top 25% least affordable markets for middle-income home buyers, a Demographia study by the US-based Chapman university has revealed.
Sydney was ranked the second-most unaffordable city to buy a home in the world, after Hong Kong, News.com reported.
The annual study, conducted by Chapman University’s Frontier Centre for Public Policy’s Demographia, compared housing markets in 94 cities across eight countries.
The research used a four-tier rating system, which are affordable, moderately affordable, seriously unaffordable, and, impossibly unaffordable, Sky News reported.
Australia’s property markets were categorized as severely unaffordable or impossibly unaffordable.
The International Housing Affordability report termed Sydney as “impossibly unaffordable,” with prices 13.8 times the average income. Apart from Sydney, Melbourne ranked at seven, Adelaide at nine, and Brisbane at 13, with all three cities being deemed “impossibly unaffordable.”
The category “impossibly unaffordable” was included in the research for the first time in 20 years, ABC News reported. The term “impossible” was added to convey the difficulty of a middle-income household to buy a house at a median multiple of 9.0.
The property price in Australia is 9.7 times the typical income, which is higher than the U.S., the U.K., New Zealand, Canada and Ireland. The survey also included Singapore and Hong Kong.
In 2019, the rate had decreased to 6.9 in 2019, but since 2020, rose by 40%. The report stated that the country also has the biggest disparity between most and least affordable prices, indicating rising inequality in income.
According to data by the Australia Bureau of Statistics, 210,800 houses are being built annually. However, nearly 240,000 homes have to be built to meet the demand.
Median-income owners would have to spend close to 60% of their gross income to purchase a median-priced property.
