Commentators are using the survey results to highlight the ‘crisis’ point that Australia has reached. Out of 92 major metropolitan markets Sydney was ranked the second least affordable while Melbourne was ranked the fifth. This is the third year in a row that Sydney has taken out second spot.
Nationally, the Australian housing market was ranked as the third least affordable country. Hong Kong was ranked first, and New Zealand was ranked second.
The survey authors note that property prices are too high in relation to the populations annual income. For example, Sydney has a median house price of $1,177,600 but a median income of only $91,600. This means the median house price is 12.9 times the median income. Survey co-author Hugh Pavletich says, “Prices are way too high, far higher than what they should be.” He recommends that housing should cost no more than three times annual income.
How does the Brisbane housing market compare?
It wasn’t just the Sydney, Melbourne and Brisbane housing market that saw Australia’s poor affordability ranking. Below is a list and the rank of the least affordable housing markets in Australia listed in the 2018 survey:
Sydney (2) – housing costs 12.9 times income
Melbourne (6) – housing costs 9.9 times income
the Sunshine Coast (16) – housing costs 8.5 times income
the Gold Coast (18) – housing costs 8.5 times income
Geelong (27) – housing costs 7.1 times income
Adelaide (34) – housing costs 6.6 times income
Fraser Coast (37) – housing costs 6.5 times income
Brisbane (38) – housing costs 6.3 times income
Hobart (39) – housing costs 6.2 times income
Perth (equal 48) – housing costs 5.9 times income
Cairns (equal 48) – housing costs 5.9 times income
Canberra (51) – housing costs 5.8 times income
Bundaberg (equal 68) – housing costs 5.4 times income
Bendigo (equal 68) – housing costs 5.4 times income
Ballart (equal 68) – housing costs 5.4 times income
Toowoomba (80) – housing costs 5 times income
Alice Springs (103) – housing costs 4.6 times income
Darwin (127) – housing costs 4.3 times income
Townsville (136) – housing costs 4.2 times income
Mackay (147) – housing costs 4.1 times income
Rockhampton (164) – housing costs 3.9 times income
Gladstone (222) – housing costs 3.2 times income
For comparison, here are some global housing markets and their survey results:
Hong Kong, China (1) – housing costs 19.4 times income
Vancouver, Canada (3) – housing costs 12.6 times income
Los Angeles, USA (8) – housing costs 9.4 times income
San Francisco, USA (10) – housing costs 9.1 times income
Auckland, New Zealand (13) – – housing costs 8.8 times income
London, UK (14) – housing costs 8.5 times income
New York, USA (56) – housing costs 5.7 times income
Tokyo-Yokohama, Japan (equal 92) – housing costs 4.8 times income
Singapore (equal 92) – housing costs 4.8 times income
While it seems crazy that Melbourne and Sydney are less affordable than mega cities like London, there is a reason. For example, London has been working to improve housing affordability by offering build-to-rent schemes and other affordability packages. As well, the results would have looked very different if apartments and rental properties had been included in the survey.
Overall, Australian housing costs on average 5.9 times income. This shows that we still have some work to do in order to get housing affordability back to where it should be – housing costs 3 times incomes.