The 10 most unaffordable major housing markets in the world
By Lucas on Jan 23, 2017
So, you think Toronto’s an expensive place to buy a home? Not according to the 13th Annual Demographia International Housing Affordability Survey: 2017. Hong Kong took the top position as the most unaffordable housing market, followed by Sydney, Australia,then Vancouver, Canada.
The survey uses the “median multiple” ratio system to determine affordability. The median house price is divided by the gross annual median household income to arrive at the ratio. According to Oliver Hartwich, Executive Director, The New Zealand Initiative, who wrote the introduction to the Affordability Survey, this system is not perfect because it does not account for house sizes and quality, but it allows for a quick comparison.
“Germany is probably the country with the most boring housing market in the world,” says Hartwich. “It is a place where nothing ever happens (at least as far as housing is concerned). German house prices remain stable, and if it had not been for the euro crisis and negative interest rates, the Germans would probably still be able to buy houses for the same prices in real terms that they paid twenty or thirty years ago.”
Hong Kong
Here are the top 10 most unaffordable major housing markets in the world:
1) Hong Kong, China
2) Sydney, NSW, Australia
3) Vancouver, BC, Canada
4) Auckland, New Zealand
5) San Jose, CA, US
6) Melbourne, VIC, Australia
7) Honolulu, HI, US
8) Los Angeles, CA, US
9) San Francisco, CA, US
10) Bournemouth & Dorset, UK
Hong Kong
The Survey also highlights the 10 most affordable housing markets in the world:
1) Racine, Wisconsin, US
2) Bay City, Michigan, US
3) Decatur, Illinois, US
4) Elmira, New York , US
5) East Stroudsburg, Pennsylvania, US
6) Karratha, Australia
7) Lima, Ohio, US
8) Moncton, Canada
9) Peoria, Illinois, US
10) Rockford, Illinois, US
According to the survey, house prices in Toronto and Vancouver increased “the equivalent of annual household incomes over the last year.” Though Toronto didn’t make the list of 10 most unaffordable, Demographia says Toronto’s housing market is severely unaffordable. Over the last 13 years, Toronto’s housing prices have just about doubled compared to household incomes.
Markets near Toronto have also been deemed unaffordable, including Hamilton and Oshawa, though locals would consider both these areas as affordable alternatives.
It’s been predicted that Toronto’s market will experience a slowdown this year (it’s for the best), so hopefully Toronto doesn’t find its way onto the top 10 list next year.
