Five Australian Cities Are Among The Most Unaffordable Places To Buy A House
Well, this is depressing.
Here in Australia, we love being the best at things, which is probably why we manage to score two spots in the top five list of most unaffordable cities in the world for 2022.
So, if you’re living in Sydney or Melbourne and wondering why it feels like you’re being crushed under the financial burden of living in a capital city, that probably explains it. According to Demographia’s International Housing Affordability 2022 report, Sydney is the second least affordable city to buy a house — with a median house price of 15.3 times more than the average household income — second only to Hong Kong, where you’ll need 23.2 average household salaries to buy a house.
But it’s not just Sydney that is grossly unaffordable to buy a home, with Melbourne also scraping in the top five — not far behind Sydney — with a median multiple of 12.1 incomes per house price. Yikes.
In total, five Australian cities made the top 20 — including Adelaide in 14th place, Brisbane at 17 and Perth at 20. To put that into perspective for you, the salary to house price ratio in Perth is equal to that in New York. Similarly, you could be living in London for the same median multiple as it costs to purchase a house in Adelaide, or could be living your best life in Honolulu for a marginally better salary to house price ratio than Melbourne.
According to report author and senior fellow at the Urban Reform Institute in Houston, Wendell Cox, all of the cities on the list have become part of an “unprecedented deterioration in housing affordability”, which is about as fun as it sounds.
“It is not surprising that in this environment, many middle-income and lower-income households have sustained deteriorating standards of living, and the causes of this do not bode well for the future,” said Cox.
The news comes after the ANZ CoreLogic Housing Affordability report — published in November 2021 — revealed that first home buyers in Australia need to save for an average of ten years just to afford a deposit. While the news is jarring for anyone hoping to buy a home before they retire, it’s hardly surprising considering house prices skyrocketed by a whopping 21.6 percent from October 202 to October 2021.
Not to mention, the report doesn’t even account for the fact that the cost of living in Australia is rising faster than wages — which means that the amount of your salary that you can actually put towards a house after filling up on $2.20/L petrol to head to Coles to buy your overpriced groceries is even less than it was a few years ago.
The report is particularly interesting ahead of the 2022 federal budget — due out on March 29 — of which housing affordability and the cost of living will be a major topic of discussion.