Hong kong has the world's least affordable property

Photo: Sanfamedia.com

Hong Kong is the world's least affordable place to buy a home, according to a new study.

The annual survey by Demographia used data from the third quarter of 2015 to compare 367 property markets around the world, with median household income used to determine whether property is affordable or not: any area with houses costing more than 5.1 times the median income is classed as unaffordable.

China's Hong Kong was ranked as the least affordable, with house prices ranked 19 times the median household income. This is sixth year in a row that Hong Kong has been given the top ranking, with prises reaching a record high in September 2015 - up from 17 times median hosuehold income in 2014.

"This is the least affordable Median Multiple ever recorded in the survey," writes Demographia, whch has been running its annual study for 11 years.

Australia's Sydney was the second least affordable, with prices 12.2 times the median household income. Melbourne was ranked fourth (9.7), with Tweeds Heads also appearing in the number 10 spot (9.3). 

This is the 12th year in a row that all of Australia's five major metropolitan areas were classed as severely unaffordable.

Indeed, among the 92 severely unaffordable markets, 33 were in Australia, followed by 29 in the United States, 17 in the United Kingdom and six in both Canada and New Zealand. There were 112 "moderately unaffordable" markete: 90 in the United States, 14 in Canada, four in Australia, two in the United Kingdom and one each in Japan and Ireland.

Despite California making up three of the top 10 several unaffordable - San Jose in joint fourth (9.7), Santa Cruz in joint seventh (9.6) and San Francisco in ninth (9.4) - the US was ranked as the most affordable overall, with a rating of 3.7 overall, followed by Japan (3.9).

14 US markets were dubbed "affordable": Buffalo, Cincinnati, Cleveland, Rochester, Pittsburgh, (#6-tie) Detroit, Grand Rapids, Oklahoma City, Columbus, Indianapolis and Kansas City, all with median multiples under 3.0.

The Demographia rankings are largely echoed by UBS, the international financial services company based in Switzerland. The five metropolitan areas ranked as most vulnerable to risk from a real estate bubble in the UBS Global Real Estate Bubble Index are each among the eight least affordable markets in the Demographia Survey (London, Hong Kong, Sydney, Vancouver and San Francisco).