The study, which covers 406 metropolitan markets in nine countries (Australia, Canada, China, Ireland, Japan, New Zealand, Singapore, the United Kingdom and the United States), bases its ranking on the “multiple mean” – the median house price divided by the median household income.
The latest Demographia International Housing Affordability Survey found Sydney was the world’s second most expensive city behind Hong Kong.
Melbourne came in at six in the study, while Adelaide (16), Brisbane (18) and Perth (20) were all ranked in the top 20 least affordable cities.
By contrast, Miami was ranked at 21 while New York was next at 22.
Demographia, which ranks housing affordability in cities with a population over one million, listed Australia’s major problem as urban containment policies.
Urban containment policies aim to curb the growth of the urban sprawl by encouraging greater density in existing housing areas rather than opening up new sites, commonly called “greenfields.”
“We should not accept extreme price levels in our housing markets. High house prices are not a sign of city’s success but a sign of failure to deliver the housing that its citizens need,” Demographia’s Director of the New Zealand Initiative Oliver Hartwich said in the report.
The news comes after new NSW Premier Gladys Berejiklian announced she would address the NSW housing crisis after declaring it “the biggest issue people have across the state”.
Demographia has long espoused an anti-regulatory approach to development, including opposing the concept of urban growth boundaries.
Its patron in Australia is former Family First senator Bob Day, a South Australian who made his name as a builder. His building companies collapsed last year, leading to his resignation from the Senate.
Demographia opened an Adelaide branch last year, prompting a debate in InDaily about the merits of capping urban sprawl.
Read a critique of Demographia’s approach here, and the think tank’s response here.
– with AAP
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