By DAMIEN NOVAK
An international survey has found Sydney the third most unaffordable city in the world in which to purchase a home.
The Demographia International Housing Affordability Survey ranks major cities around the globe using a house price to income ratio, and found the only cities more unaffordable than Sydney were Vancouver (#2) and Hong Kong (#1).
The survey placed cities in four categories, according to an ‘affordability score’: affordable (a score of 3.0 or under), moderately unaffordable (3.1 to 4.0), seriously unaffordable (4.1 to 5.0) and severely unaffordable (5.1 and over).
With a score of 11.8, the Harbour City was firmly entrenched in the severely unaffordable category.
Hong Kong and Vancouver scored 20.7 and 13.0, respectively, while the fourth most unaffordable, Auckland, was given a score of 10.0.
Sydney’s unenviable position on the list means it is considerably worse for housing affordability than many larger cities overseas, including New York City, Los Angeles, Washington DC, London and Singapore.
House prices: World’s most unaffordable cities
According to the Demographia International Housing Affordability Survey 2021
1. Hong Kong, China
2. Vancouver, Canada
3. Sydney, Australia
4. Auckland, New Zealand
5. Toronto, Canada
6. Melbourne, Australia
7. San Jose, USA
8. San Francisco, USA
9. Honululu, USA
10. Los Angeles, USA
However, the survey did not include Tokyo – consistently rated one of the world’s most expensive cities by other surveys – as it only took into account housing affordability in major cities across eight nations: Australia, Canada, China (Hong Kong only), Ireland, New Zealand, Singapore, the UK and the USA.
Melbourne was the only other Australian city to feature in the Top 10, coming in at number six.
The survey was released as housing analysts CoreLogic reported house prices jumped 2.1 per cent in Australia last month – the largest national monthly rise since August 2003.
Record low mortgage rates, improving economic conditions, government incentives and Australian citizens moving back from Covid-hit countries were behind the rise.
Sydney’s price rise (2.5 per cent in February) was above the national average. However many rural and regional locations also recorded strong house price rises, with Covid-19 leading to more people working from home. Those working from home do not have to work in cities, giving them greater flexibility in housing location.
Griffith University urban planner Tony Matthews told News.com.au: “The move out of cities is on; we’re not going backward from this.
“The most important connection [for workers] had been a train line; now the most important infrastructure is a decent broadband connection.”
Despite this trend, CoreLogic did not envisage an improvement in Sydney’s – or Melbourne’s – housing affordability.
“At this current rate of appreciation it won’t be long before Australia’s two most expensive capital city markets are moving through new record highs,” CoreLogic’s research director, Tim Lawless, said.
“With household incomes expected to remain subdued and stimulus winding down, it is likely affordability will once again become a challenge in these cities.”