Least Affordable Housing Markets In Six Countries

The 2nd Edition of the Demographia International Housing Affordability Survey expands coverage to the United Kingdom and the Republic of Ireland, together with the nations included in the first edition, Australia, Canada, New Zealand and the United States.

Of the six countries and one hundred major urban property markets covered, 24 are affordable, 23 moderately unaffordable, 11 seriously unaffordable and 42 severely unaffordable.

All the major urban property markets of New Zealand are severely unaffordable, as is the major city of the Republic of Ireland, Dublin. Of the Australian urban markets, six are severely unaffordable, with two being seriously unaffordable. The United Kingdom has just one moderately unaffordable market, with the other eleven being severely unaffordable. Canada has three affordable, four moderately unaffordable, one seriously unaffordable with Vancouver being severely unaffordable. The huge and diverse United States has twenty one affordable markets, eighteen moderately unaffordable markets, eight seriously unaffordable and twenty severely unaffordable urban markets.

All the affordable markets are in North America, with three in Canada and twenty one in the United States. There are no affordable major urban property markets in the United Kingdom, Ireland, Australia and New Zealand.

"Last Affordable: The least affordable markets are generally in California, Hawaii, the US east coast, Australia, the United Kingdom, New Zealand and Vancouver. The most unaffordable market is Los Angeles & Orange County, with a Median Multiple of 11.2, far above the 'severely unaffordable' threshold of 5.1. The Median Multiple is 8.5 in Sydney, 6.9 in London, 6.6 in Auckland, 6.6 in Vancouver and 6.0 in Dublin."

"Most Affordable: Many markets remain 'affordable.' For example, the markets in the three fastest growing metropolitan areas over 5,000,000 population all have Median Multiples below 3.0 and are thus rated 'affordable' (Atlanta, Dallas-Fort Worth and Houston). Other affordable markets include three in Canada (Winnipeg, Edmonton and Quebec) and another 18 in the United States."

New and existing house sizes differ significantly among the countries surveyed. The average new house size in Australia and the United States is about 2,200 square feet, Canada and New Zealand 1,900 square feet and both the United Kingdom and Ireland an extraordinarily low 815 square feet and 930 square feet respectively. New British housing is now only 15% larger than the former East German slab developments, of which one million have been vacated, since the reunification of East and West Germany.

The 2006 Demographia International Housing Affordability Survey illustrates how affordable most urban markets of the countries surveyed were five, ten and twenty years ago. Its findings suggest that the major cause of the loss of affordability within these markets is due to artificially strangled land supply.

The survey authors are Wendell Cox of the Wendell Cox Consultancy (Demographia) , St Louis, Illinois, USA and Hugh Pavletich, Pavletich Properties Ltd, Christchurch, New Zealand.