January 22, 2007
3rd Annual Demographia International Housing Affordability Survey
The 3rd Annual Demographia International Housing Affordability Survey expands coverage to 159 major markets in Australia, Canada, Ireland, New Zealand, the United Kingdom and the United States. The Demographia International Housing Affordability Survey employs the “Median House Price to Median Household Income Multiple,” (“Median Multiple”) to rate housing affordability (Table ES-1).
In recent decades, the Median Multiple has been remarkably similar among the nations surveyed, with median house prices being generally 3.0 or less times median household incomes. This historic affordability relationship continues in many housing markets of the United States and Canada. However, the Median Multiple has escalated sharply in Australia, Ireland, New Zealand and the United Kingdom and in some markets of Canada and the United States.
2006 Housing Affordability Ratings
The most pervasive housing affordability crisis is in Australia, with an overall Median Multiple of 6.6. Affordability is only marginally better in New Zealand (6.0) Ireland (5.7), and the United Kingdom (5.5). On the other hand, the national Median Multiple in Canada is 3.2, indicating that housing is one-half as expensive relative to incomes as in Australia. The national Median Multiple in the United States is 3.7.
Least Affordable Markets: The least affordable markets are generally in California, Hawaii, the US East Coast, Australia, the United Kingdom, New Zealand and Vancouver. The least affordable market is Los Angeles & Orange County, with a Median Multiple of 11.4, far above the “severely unaffordable” threshold of 5.1 and approaching four times the 3.0 “affordability” standard. The Median Multiple is 8.5 in Sydney, 8.3 in London, 7.7 in Vancouver, and 6.9 in Auckland. All of the 25 least affordable markets are rated “severely unaffordable” (Table ES-2). Ireland’s only surveyed market, Dublin is also rated severely unaffordable, at 5.7.
Affordable Markets Remain: At the same time, 42 markets remain “affordable.” Seven of the “affordable” markets are in Canada and 35 are in the United States. The most affordable markets are Regina, Fort Wayne and Youngstown. Some of the fastest growing markets in the survey remain “affordable,” such as Dallas-Fort Worth, Houston, Atlanta and Oshawa (Table ES-3).
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