Photo: David Leo Veksler/Flickr
The survey looked at markets in eight countries — Australia, Canada, Ireland, Japan, New Zealand, Singapore, the US and the UK — as well as Hong Kong. A total of 85 metropolitan markets with over 1 million inhabitants were included, among them were five of the six largest metropolitan areas in the “high income world.”
Hong Kong was by far the least affordable market measured by Demographia, recording a housing affordability rating of 14.9, the highest level ever recorded in the 10 years that the think tank has been compiling the survey. A housing affordability rating of 5.1 and over is classified as “severely unaffordable” and a reading of below 3 is considered “affordable.”
Vancouver was ranked as the second least affordable market in the world with a rating of 10.3. This was the sixth year in a row that Vancouver was ranked as one of the two least affordable major markets in the Demographia survey.
Honolulu was the least affordable American market with an affordability rating of 9.4. While the Hawaiian capital’s current population level means it does not qualify as a major metropolitan area, its present growth rate should see the city achieve that distinction by 2015.
Demographia uses the “Median Multiple” to evaluate the urban housing markets it surveys, a measure that is recommended by the World Bank and the United Nations. The Median Multiple measures the ratio of the median house price to the median annual household income.
Here’s a rundown of a few more highlights from the survey:
- In major markets across California, the Media Multiple has increased at more than three times the national rate and is reminiscent of ratios at the peak of the housing crisis in the state.
- There were only 14 markets rated as affordable in the survey and all of them were located in the US.
- The most affordable market in the survey was Pittsburgh (2.3) followed by Detroit (2.5).
- Australia was home to the most severely unaffordable markets (25) followed by the US (23) and the UK (15).
- Housing affordability worsened in Canada’s major markets. Vancouver (10.3) was ranked as the country’s least affordable market followed by Toronto (6.2).