Provided you were struck in the cranium with a brick from the construction site of a house you will never be able to afford, you may have entirely overlooked the shithouse climate we’re existing in when it comes to owning your own sanctuary. A kindly source has run the numbers to remind us that the real estate landscape is a perpetual clusterfuck. Let’s all plot to live in an attainable shanty town.
The latest gossip courtesy of the Annual International Housing Affordability Survey by organisation Demographia charted the cost of houses located in the US, New Zealand, Ireland, Canada, Singapore, Japan, our very own continent, Australia. The deduction was that purchasable dwellings in all major cities in Australia continue to be “severely unaffordable”. Aww, raspberries.
Behind the curtains, the survey arrived at this hierarchy of affordability by first dividing the median house value by the median salary of those living there, which produces a number affectionately referred to as the median multiple. If real estate is deemed “affordable”, it has a median multiple of 3.0 or less, whereas if it is branded as “severely unaffordable” this indicates the score is 5.1 or more.
The Harbour City. The shining beacon that is the Emerald City. Or simply, Sydney, received the unfortunate label of second-least-affordable city in the study, scoring a whopping 12.9 on the scale. This indicates that the median house price in Sydney is 12.9 times the median yearly income. Thankfully, the city was overtaken by Hong Kong, with a face-reddening score of 19.4.
Sydney is not the only Australian city to receive a blasting, either. Homesteads in both Melbourne and Sydney were actually not as cost-effective in comparison with those in New York, San Francisco, London and Los Angeles, however, the aforementioned still rated rather shabbily. In general, Australia’s main housing markets achieved 6.6, which is considerably over the “severely unaffordable” level.
Demographia’s argument that Australia’s skyrocketing home prices are triggered chiefly by swelling land costs is reinforced by evidence. The main reason for the land price boom within our nation (along with NZ, the UK, and the ludicrous figures associated with the US and Canada) is that the market’s capacity to rapidly deliver low priced new homes is being hindered by obstructive land use legalisation and many of these rules have been in place circa the mid-1990s (Sydney has had well-established restrictions on housing expansion on the urban hinterland).
In comparison, inexpensive housing markets, like numerous cities in the US, employ open market-based land use assemblies in which abundant new housing supply is capable of being constructed swiftly and for a modest price on the outskirts, thus averting hasty abode price increases.
We acknowledge that specialists have nit-picked the calculation methods of Demographia — rival statistics from an organisation entitled CoreLogic, for instance, classified Sydney’s median multiple as 9.1. Their methodology involved considering the market value of apartments. 9.1 is still gargantuan of course, nevertheless, the ultimate conclusion is essentially identical: housing expenses in the Australian climate are thoroughly bollixed. Instead, we should resign ourselves to decaying in a luxurious tent, which could double as a biodegradable coffin.