Struggling to afford a home? Find out where Australian capitals rank in the world's priciest markets!
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The dream of owning a home is becoming increasingly elusive for many Australians, especially those living in our major capital cities. A recent study by United States academics from the Chapman University Frontier Centre for Public Policy has shed light on a sobering reality: nearly all of Australia's major capitals rank in the top 25 percent of the world's least affordable markets for middle-income home buyers.
The 'Demographia International Housing Affordability' report, which has been tracking global housing markets for two decades, uses a metric known as the 'median multiple' to gauge affordability. This ratio compares median incomes to median house prices, providing a clear picture of how attainable home ownership is for the average person.
The study revealed that limited land policies drive soaring home costs. Credit: Unsplash
The findings are stark. Cities like Sydney, Melbourne, Adelaide, Brisbane, and Perth are not just scraping by on the list; they're firmly entrenched in the least affordable 25 percent of the 94 markets included in the study. Sydney, in particular, stands out as one of the most unaffordable markets, keeping company with the likes of Hong Kong and Vancouver.
But what's driving this crisis? The report points to land use policies that restrict housing supply, causing land prices to soar and putting home ownership out of reach for many. It's a growing problem that has led the authors to introduce a new category for housing affordability: 'impossibly unaffordable.' This term underscores the extreme difficulty middle-income households face, with a median multiple of 9.0 or more, a level of unaffordability that was unheard of just a few decades ago.
Urban planning policies aimed at curbing urban sprawl and increasing city density have had unintended consequences. These policies have skewed land values and house prices against the middle class, who rely on a competitive land market that has been disrupted by these planning strategies.
In Australia, the latest Bureau of Statistics data indicates that while there are 210,800 dwellings being built every year, to meet demand, this figure needs to increase to around 240,000 homes. Analysts have suggested that median-income earners would need to spend about 60 percent of their gross income to purchase a median-priced property, a staggering figure that highlights the gravity of the situation.
However, it's not all doom and gloom on the global stage. The study highlights the success story of Singapore, which has transformed from a 'desperate housing situation' in the 1960s to one of the most affordable markets in the report. Over 90 percent of Singaporean citizens own their homes, thanks to the government's Housing and Development Board (HDB) policies that have encouraged home ownership among lower-middle-income groups.
Prime Minister Lee Hsien Loong's recent reiteration of Singapore's commitment to high-quality public housing serves as a beacon of hope. It's a testament to the fact that with the right policies and government support, the tide of housing unaffordability can be turned.
For our members here at the Seniors Discount Club, the challenge of housing affordability may hit close to home, whether you're considering downsizing, helping your children enter the property market, or simply concerned about the economic landscape for future generations.
We invite you to share your thoughts and experiences. Have you felt the pinch of rising house prices in your city? What solutions do you think could help address this issue? Join the conversation below and let's discuss how we can advocate for a more affordable housing market for all Australians.
The 'Demographia International Housing Affordability' report, which has been tracking global housing markets for two decades, uses a metric known as the 'median multiple' to gauge affordability. This ratio compares median incomes to median house prices, providing a clear picture of how attainable home ownership is for the average person.
The study revealed that limited land policies drive soaring home costs. Credit: Unsplash
The findings are stark. Cities like Sydney, Melbourne, Adelaide, Brisbane, and Perth are not just scraping by on the list; they're firmly entrenched in the least affordable 25 percent of the 94 markets included in the study. Sydney, in particular, stands out as one of the most unaffordable markets, keeping company with the likes of Hong Kong and Vancouver.
But what's driving this crisis? The report points to land use policies that restrict housing supply, causing land prices to soar and putting home ownership out of reach for many. It's a growing problem that has led the authors to introduce a new category for housing affordability: 'impossibly unaffordable.' This term underscores the extreme difficulty middle-income households face, with a median multiple of 9.0 or more, a level of unaffordability that was unheard of just a few decades ago.
Urban planning policies aimed at curbing urban sprawl and increasing city density have had unintended consequences. These policies have skewed land values and house prices against the middle class, who rely on a competitive land market that has been disrupted by these planning strategies.
In Australia, the latest Bureau of Statistics data indicates that while there are 210,800 dwellings being built every year, to meet demand, this figure needs to increase to around 240,000 homes. Analysts have suggested that median-income earners would need to spend about 60 percent of their gross income to purchase a median-priced property, a staggering figure that highlights the gravity of the situation.
However, it's not all doom and gloom on the global stage. The study highlights the success story of Singapore, which has transformed from a 'desperate housing situation' in the 1960s to one of the most affordable markets in the report. Over 90 percent of Singaporean citizens own their homes, thanks to the government's Housing and Development Board (HDB) policies that have encouraged home ownership among lower-middle-income groups.
Prime Minister Lee Hsien Loong's recent reiteration of Singapore's commitment to high-quality public housing serves as a beacon of hope. It's a testament to the fact that with the right policies and government support, the tide of housing unaffordability can be turned.
For our members here at the Seniors Discount Club, the challenge of housing affordability may hit close to home, whether you're considering downsizing, helping your children enter the property market, or simply concerned about the economic landscape for future generations.
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