Finding an affordable house anywhere in the world has become tough.
Examining Housing Affordability
There is a reason as to why the “American Dream” is called a “Dream” to start with and one of the reason why is it still a dream of people living outside the country that it is so damn expensive.
The land of opportunities is not a very affordable location and the same is reflective in the report which claims that all top 5 most expensive urban areas in the world are located in the United States.
The report titled the “Annual Demographic International Housing Affordability Report” tracks the housing costs and ranks the affordability of houses globally. Notably, the report has been doing so for over two decades.
Let’s take a deep dive into the insights and results shared in the report.
The housing report claims that Hong Kong, Asia’s financial hub, is the least affordable city in the English-speaking world.
The regular entrant to the list of least affordable city, has only 51% of homeownership rate, which is also the lowest in all the surveyed cities.
The only Chinese city in the list is known for its small apartments and high rents. Notably, for new buyers it should be interesting to know that the prices have decreased.
What can be attributed for the fall in property prices could be the zero-COVID policy and border closures by the government during the pandemic in 2020 coupled with new national security measures.
As per the survey, 5 out of top 10 most expensive locations were US cities located on the West Coast and in Hawaii.
No wonder the likes of San Jose, Los Angeles, San Francisco, and San Diego are among the top 10 most expensive US cities to buy a home in.
Across 94 significant marketplaces across eight nations, the capital of Hawaii, Honolulu sits at 6th spot.
The only nation other than US, Australia, with its cities of Sydney, Adelaide, and Melbourne are also named in the list of “impossibly unaffordable” cities.
Global Survey on Housing Affordability Amidst Pandemic and Remote Work Trends
8 major countries were covered in the survey which include – Australia, Canada, China, Ireland, New Zealand, Singapore, the United Kingdom, and the US. Across these 8 countries, researchers collected data from 94 major markets in order to rank them.
In order to gauge housing affordability, a “median multiple” is used in the report.
Under this, the median home price is divided by the median household income.
This metric categorizes markets into five affordability levels:
- Affordable (3.0 and under)
- Moderately Unaffordable (3.1 to 4.0)
- Seriously Unaffordable (4.1 to 5.0)
- Severely Unaffordable (5.1 to 8.9)
- Impossibly Unaffordable (9.0 and over).
What has led to the massive increase in housing demand is the COVID-19 pandemic’s percolation and rise of remote work, coupled with urban containment policies limiting land use.
