As if the prospect of owning a property wasn’t daunting enough, a new global study has revealed the most unaffordable cities to buy a house – and we’re saddened to reveal that Melbourne has landed at seventh on the list. Yep, in this era of cozzie livs, this is hardly a title we ever wanted or needed.
For the past 20 years, the Demographia International Housing Affordability Report has analysed middle-income housing affordability across 94 major markets in eight countries, including Australia, Canada, China, Ireland, New Zealand, Singapore, the United Kingdom and the United States. The report ranks each city based on its median multiple score, calculated by dividing the average house price in a city by its gross median household income. A score of 5.1 or more is considered ‘severely unaffordable’, and this year, a new category, ‘impossibly unaffordable’, was introduced for those scoring nine or above.
The semi-good news is that nearly 90 per cent of cities in the world did not fall in the ‘impossibly unaffordable’ category. However, the bad news is more than a quarter of those cities deemed as ‘impossibly unaffordable’ are in Australia.
While Melbourne’s ranking of seventh, with a median multiple score of 9.8 (which is up two spots from last year), is a shock, spare a thought for anyone hoping to buy a home in Sydney. Australia’s largest capital city is the second least affordable major property market in the world, with a staggering median multiple score of 13.8. This also marks the 15th time in the last 16 years that Sydney has claimed a spot in the top three.
Adelaide wasn’t far behind, landing in ninth place with a median multiple of 9.7 (a significant jump from 14th place in 2023), with Brisbane and Perth ranking 13th and 16th respectively.
The report highlighted that skyrocketing housing prices, which outpace income growth, are the main cause of this nationwide middle-class housing crisis. This issue is only escalated by limited land availability and surging demand. Perhaps it’s time to trade your thongs for some snow boots and head to Pittsburgh, which ranked as the most affordable housing market out of all 94 cities analysed.
Here are the ten least affordable major housing markets in the world:
1. Hong Kong, China
2. Sydney, Australia
3. Vancouver, Canada
4. San Jose, USA
5. Los Angeles, USA
6. Honolulu, USA
7. Melbourne, Australia
8. San Francisco, USA
9. Adelaide, Australia
10. San Diego, USA
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