Australia's 'affordability' shock

A new survey has revealed that Australia has no ‘affordable’ housing markets…

According to the 2008 Demographia International Housing Affordability Survey, which examined the housing affordability situation of 227 urban markets, Australia is the second most unaffordable market in the English-speaking world.

Some 25 of the country’s 28 markets are rated as ‘severely unaffordable’. Under this system, the small coastal town of Mandurah in Western Australia is Australia’s most expensive property market at 9.5 times the medium salary. All of Australia’s large capital cities (Sydney, Perth, Melbourne, Brisbane and Adelaide) are rated as ‘severely unaffordable.’ The best ratings are for ‘seriously unaffordable’ property in the three small markets of: Maitland (4.8); Ballarat (5.0) and Bendigo (5.0).

Playing with peoples’ lives

Demographia rated the urban markets by the ‘median multiple’ method, where the median house price of a market is divided by the median annual household income and is the method recommended by the UN and the World Bank.

The firm said that countries where property is worth less than 3 times the annual salary is judged ‘affordable’; three to four times ‘moderately unaffordable’; four to five times ‘seriously unaffordable’ and property over five times the annual household income as ‘severely unaffordable’.

Co-author of the Annual Survey Hugh Pavletich said: “Evidence of the housing affordability crisis is clear, overwhelming and irrefutable.  Governments must allow affordable housing to be built on their urban fringes, and they must stop playing games with young people’s lives”.