Housing in Australia's major cities is among the least affordable in the world and the nation has the third most expensive housing market on Earth, a new study has found.
International housing affordability think tank Demographia has released its 13th survey on house prices around the world, taking in prices from the third quarter of 2016, and found Sydney had the second most unaffordable major city housing in the world. Melbourne followed close behind, coming in at number six on the unaffordable list.
The survey compares average home prices to median income, taking in 94 major cities and 406 areas in total. Houses that are three times the median income, or less, are deemed 'affordable'. A house costing more than five times the median income is deemed 'severely unaffordable'.
Sydney housing comes in at 12.2 times the median income. Melbourne is 9.5.
On Tuesday, Domain reported Sydney's median house price was now a record $1,123,991.
Adelaide, Brisbane and Perth are also ranked 'severely unaffordable' in the Demographia report, coming in at 6.6, 6.2 and 6.1 times the median income respectively.
On a national level, Australia's housing affordability is rated the third-worst in the world. Hong Kong takes first spot with a national number of 18.1, while perhaps a surprise entry at number two is New Zealand with 5.9. Australia is just behind on 5.5.
"Among the 94 severely unaffordable markets, 33 are in Australia," the report stated.
The report comes just a month after the government's failure to offer even a single solution to housing affordability after spending 20 months compiling a report on the issue. It will also be no surprise to prospective homebuyers who are seeing such ludicrous housing events as tin sheds, burnt out houses and ramshackle shacks selling for millions of dollars in Sydney.
Looking at all housing markets surveyed, including smaller non-major cities, Australia fares even worse. Demographia's ranking of 406 markets globally sees NSW's Wingecaribbee and Tweed Heads area coming in at numbers seven and eight, with houses there costing 9.8 and 9.7 times the median income. On the list of all markets surveyed, Melbourne comes in at number 10, giving Australia the dubious honour of having four areas in the top ten least affordable in the world, the most of any country surveyed.
The Sunshine Coast, Port Macquarie, Wollongong and the Gold Coast also rank in the 20 most unaffordable areas in the world, with housing costs around nine times the median income.
"Four housing markets [in Australia] are affordable, three are moderately unaffordable, 14 are seriously unaffordable and 33 are severely unaffordable," Demographia said in the report.
"In 2004 (the first survey), Sydney's median multiple is 7.6, and has risen 60 percent since then. Sydney's 12.2 median multiple (in the last two years) represents the poorest housing affordability ever recorded by the survey outside Hong Kong. The UBS Global Real Estate Bubble Index rates Sydney as having the world's fourth worst housing bubble risk."
The full report is available at Demographia's website.
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