Cities with a price-to-income ratio higher than 5.1 are considered "severely unaffordable"
Sydney is the third least affordable city in the world to buy a home in, with Auckland and Melbourne not too far behind, according to Demographia’s latest International Housing Affordability Survey.
Across 92 cities in eight nations, Hong Kong tops the chart with a price-to-income ratio of 20.7, followed by Vancouver’s 13, Sydney’s 11.8, Auckland’s 10, Toronto’s 9.9 and Melbourne’s 9.7.
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Also included in the top 20 are Adelaide, Brisbane and Perth, at 7.7, 6.6 and 6 respectively.
Cities with a price-to-income ratio higher than 5.1 are considered “severely unaffordable.”
In August, the mid-point price of houses and apartments in Sydney stood at $1.039 million--11 times the average full-time income of $90,329. Meanwhile, the median house price in Melbourne was $954,496.
The median rating for all metropolitan areas of Australia is 7.7, as the combined capital cities were priced at $751,014 in August.
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The results of Demographia’s newest survey aren’t surprising given that the median property price surged by 18.4% last month, marking the fastest annual pace since July 1989. This increased median values in both capital cities and regional areas to $666,514.
The survey dropped a day after the Council of Financial Regulators announced it was considering toughening lending rules in order to diffuse the overheating housing market.
