Housing in four major Aussie cities rated impossibly unaffordable by new study

An international housing affordability study has backed up what many Aussies already know – four major Australian cities are ‘impossibly unaffordable’.

Four major cities in Australia have been declared “impossibly unaffordable” by international researchers who rate housing affordability across the globe.

Sydney, Melbourne, Brisbane, Adelaide and Perth all made the top 20 most unaffordable cities in 95 major markets in the 2025 Demographia International Housing Affordability report.

The study released each year examines markets in Australia, Canada, China, Ireland, New Zealand, Singapore, the UK and US.

Chapman University’s Centre for Demographics and Policy has conducted the study for the past two decades noting, housing inflation had grown all around the world.

Sydney, Melbourne, Brisbane, Adelaide and Perth all made the top 20 most unaffordable cities in 95 major markets across the globe in the 2025 Demographia International Housing Affordability report. Picture: NewsWire/ Nadir Kinani

The centre’s director Joel Kotkin said high prices had been driven by policies that limited growth on the periphery, which was the usual way cities had grown.

“The Dermographia report has shown that where such policies predominate, for example in the UK, California, Washington, Oregon, Colorado, New Zealand, Australia and much of Canada, the results are disastrous, at least for potential homebuyers,” he said.

Sydney was the second most unaffordable city in the study behind Hong Kong, Adelaide was 6th, Melbourne 9th, Brisbane 11th, and Perth 18th.

Sydney, Adelaide, Melbourne and Brisbane were all rated impossibly unaffordable, while Perth was rated severely unaffordable.

Australians are finding it hard to break into buying in the housing market. Picture: NewsWire/ Nadir Kinani

Dermographia principal Wendall Cox said in the report Sydney had the first, second or third least affordable housing of any major market in 16 of the last 17 years.

“Even the smallest Australian market, Adelaide, endures an impossibly unaffordable median multiple of 10.9, ranked 90th among the 95 markets,” he said.

“It is remarkable that these markets are less affordable than widely recognised world cities like New York, London, or Chicago.”

The report found middle-income home ownership was once common, with house prices aligned to incomes, but prices had surged since the 1990s.

Mr Cox said healthy markets had been broken by escalating house prices far beyond household incomes.

He said markets in cities, such as San Francisco, Sydney and London were governed by urban containment strategies, and were now 9 to 15 times more than household incomes.

“Nearly all severely unaffordable housing markets follow the urban containment model,” he said.

“The resulting land scarcity inflates prices, particularly near urban growth boundaries.”

Researchers warned densifying urban areas with multi-rise housing over single family homes was unfavourable when it was too expensive for middle income households and unattractive for many households. Picture: NewsWire / Luis Enrique Ascui

Researchers identified land value in areas that had urban containment policies was often the most expensive factor when buying a home.

The study found land values spiked across the market when areas around urban growth boundaries and greenbelts were permitted.

The researchers warned densifying urban areas with multi-rise housing over single family homes was unfavourable when it was too expensive for middle income households and unattractive for many households.

They also raised questions about whether denser living improved housing affordability with other studies showing mixed results for housing affordability.