Sydney’s housing market ranked the second least affordable in the world, report reveals
‘Unprecedented’ growth in Harbour City house prices – six times the rate of inflation – will likely send Sydneysiders’ standards of living plummeting, an expert report has warned.
‘Unprecedented’ growth in Harbour City house prices – six times the rate of inflation – will likely send Sydneysiders’ standards of living plummeting, an expert report has warned.
Sydney’s housing market has ranked as the second least affordable in the world for the second year running, posing a threat to “standards of living”.
A global report rating middle income housing affordability has ranked Sydney 93rd out of 94 metropolitan markets.
The Demographia International Housing Affordability report for 2023 was released on Monday, with Sydney ranking just ahead of the world’s least affordable nation Hong Kong.
Sydney retained its position from the 2022 report after falling from the third least affordable market in 2021, with the report revealing house prices had increased six time the rate of inflation.
“There is a broad view that deteriorating housing affordability is an existential threat to the middle-class,” author Wendell Cox, from the Urban Reform Institute, stated.
MORE: Latrell Mitchell’s controversial farm for sale
Byron prices plummet in ‘reverse Hemsworth effect’
$35m Byron Bay celebrity hideaway up for grabs
“Housing affordability in 2022 continued to reflect the huge price increases that occurred during the pandemic demand shock.
“Some housing affordability improvements have since occurred and more are likely as the demand shock is hopefully replaced by more normal market trends.”
The latest report, from the 2022 September quarter, ranked markets based on income in relation to housing prices across Australia, Canada, China, Ireland, New Zealand, Singapore, the United Kingdom and the United States.
According to the report, “Sydney has the least affordable market, with a median multiple of 13.3, the second least affordable market internationally”.
“Australian markets have a median multiple of 8.2, up from 6.9 in 2019,” the report states.
“This is an increase of 1.3 years of median household income.
“All five of Australia’s major housing markets have been severely unaffordable since the early 2000s.”
Australia’s other major cities also ranked highly on the least affordable housing market list, with Melbourne in 9th position, Adelaide 14th, and Brisbane 15th. Perth is ranked at 50th.
“Australia’s major housing markets have had especially severe housing affordability losses,” the report stated.
“Adelaide median house prices have increased 6.1 times the rate of inflation since 2020, as
measured by the Consumer Price Index (CPI).
“Sydney prices increased 6.0 times the CPI, Brisbane 5.2 times, Melbourne 4.9 times and Perth 4.2 times.
“In each of these five housing markets, the house price inflation since 2000 exceeded that of all of the product groups constituting the CPI.”
The report indicated that the affordability issue could see a decline in “standards of living”.
“As pandemic and lockdowns continued into another year, the movement of households from
denser urban neighbourhoods to larger homes, often with large yards (gardens) in suburban and outlying areas has continued,” the report stated.
MORE: Huge interest as Delta Goodrem’s home sold
‘Scare’ tactics Jackie O used to win $20m home ‘war’
Gold Coast staycation going for a bargain
“The result has been to drive up prices at unprecedented rates in many markets. As a result many low-income and middle-income households who already have suffered the worst consequences from housing inflation will see their standards of living further decline.”
The top three markets for affordability were in the US, with Pittsburgh the most affordable, followed by Rochester (New York) and Cleveland.
WORLD’S LEAST AFFORDABLE HOUSING MARKETS
1. Hong Kong
2. Sydney
3. Vancouver
4. Honolulu
5. San Jose
6. Los Angeles
7. Auckland
8. San Francisco
9. Melbourne
10. Toronto
11. San Diego
12. Greater London
13. Miami
14. Adelaide
15. Bournemouth and Dorsett
16. Bristol-Bath
17. Brisbane
18. London Exurbs
19. New York City
20. Riverside-San Bernardino
Originally published as Sydney’s housing market ranked the second least affordable in the world, report reveals