Homeownership Affordability in Australia

For the second year running, Australia's most populous city, Sydney, was listed as the second most expensive place in the world for housing, according to the 13th annual Demographia International Housing Affordability Survey, released in January 2017. Melbourne, Australia's second-largest city in terms of population, was not far behind, in sixth position. (Exhibit 1 presents a map showing Australian states and territories, and Exhibit 2 features Australia's 2016 population distribution and growth since 2011 across its capital cities.) With median multiples of 12.2 and 9.5, respectively, Sydney and Melbourne's housing was less affordable than such famously high-cost cities as San Francisco (9.2), New York (5.7), and Boston (5.4). As a nation, Australia was the third least affordable for housing, with a median multiple of 6.6 across major markets (i.e., those with a population of more than 1 million), better only than Hong Kong and New Zealand and well above the United States, whose median multiple for major markets was nearly 41% less than Australia's. For most people living in Sydney and Melbourne, the survey's findings affirmed what they already knew: Australia was experiencing a housing affordability crisis.