The US-based consultancy Demographia published its 20th annual International Housing Affordability Report measuring the affordability of 94 housing markets in eight countries.

Australia’s five largest housing markets are included in the report.

The methodology is rather simple. Take the median cost of a house in each market and divide that number by the median household income in the same market. The median, of course, describes the middle price – half the houses cost more than the median, while the other half are cheaper.

Demographia calls a housing market with an income multiple of five severely unaffordable. If a house cost more than seven times the annual income, the market is described as impossibly unaffordable. Yikes.

Not one of the eight countries included in the study features an “affordable housing market” where less than three annual median incomes would buy a median house. Best placed are regional centres in the US such as Pittsburgh (3.1), Rochester (3.4), and St. Louis (3.4).

You guessed correctly that Australian cities came nowhere near these ratings. The most affordable Australian city included in the report is Perth (6.8).

Source: Demographia

Due to high household incomes, driven by generous wages in the mining industry, homes in Perth narrowly miss out on the impossibly unaffordable rating and are classified only as severely unaffordable. What a success!

Severe unaffordability is the best Australia has to offer. Brisbane (8.1) has become impossibly unaffordable. For Adelaide (9.7) and Melbourne (9.8) we must think of a superlative for the word impossible.

Things have only gotten progressively........

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