Australia this week achieved the dubious notoriety of having one of the least affordable housing markets of those surveyed in the 3rd Annual Demographia International Housing Affordability Survey.
Of the 159 cities surveyed in six countries worldwide, Sydney, Melbourne, Perth and Hobart ranked among the 25 least affordable cities.
None of the surveyed urban markets of Australia, Ireland, the United Kingdom and New Zealand achieve affordability. The only affordable markets were found to be the other two countries covered in the survey - the United States and Canada.
To achieve the internationally-accepted standard of housing affordability, house prices should not exceed three times annual household income.
Overall, Canada achieved the best performance, with its citizens only needing 3.2 years of annual income to purchase a home. In the United States it takes 3.7 years; Britain 5.5 years; Ireland 5.7 years; and New Zealand 6 years.
Australians face 6.6 years of income on average to house themselves.
These "years of income" required to purchase a house within individual markets is understated, because the majority of house purchasers require mortgages, and interest charges tend to more than double the full cost of a house.
This year's Demographia Survey outlines the international research, political concern and growing consensus evolving in the past twelve months, in recognising the seriousness of this issue and the need to find solutions as soon as possible.
The survey authors are of the view that these problems are not complex, so there is no need for complex solutions.
Freeing up land use processes and minimising distortions in peripheral land prices are among the key areas they suggest that need to be focused on so that housing affordability is restored within the markets currently experiencing housing stress.
