Hong Kong, Vancouver and Honolulu have the least affordable housing markets across nine nations in the Demographia International Housing Affordability survey.
The median home price in Hong Kong rose to 14.9 times gross annual median household income from 13.5 times last year, according to the 10th annual report by the Belleville, Illinois-based consulting company. Homes in Vancouver cost 10.3 times income and 9.4 times in Honolulu. Australia and New Zealand were the most unaffordable countries after Hong Kong, with home prices at 5.5 times gross income.
The survey examined housing prices in 360 metropolitan markets in Australia, Canada, Hong Kong, Ireland, Japan, New Zealand, Singapore, the U.K. and the U.S. A reading of 5.1 or more is “severely unaffordable,” while below 3 is affordable.
Surging home prices across Hong Kong, Australia and Canada have raised concerns about bubbles in markets that top the Demographia survey. Hong Kong home prices have more than doubled since the beginning of 2009, driven by demand from mainland China and mortgage rates at record lows. In Australia, historically low central bank rates pushed home prices in the nation’s major cities 9.8 percent higher in 2013, and Canadian property prices are forecast to continue climbing this year.
“Land use regulations and the availability of trunk infrastructure heavily constrain the supply of developable land,” Alain Bertaud, senior research scholar at the Stern School of Business at New York University, wrote in the introduction to the report. “If planners abandoned abstracts and unmeasurable objectives like smart growth, livability and sustainability to focus on what really matters -- mobility and affordability -- we could see a rapidly improving situation in many cities.”
Ireland was the most affordable country for housing, with homes costing 2.8 times incomes. Rockford, Illinois, was the most affordable city across all markets, and Pittsburgh was the most affordable in cities with populations of more than 1 million, the survey showed. Except for the U.S., no country had cities with more than 1 million people where the median home price was less than three times income, according to the report.