Sydney ranks second worse in the world for housing affordability

ABC NEWS (Australia)

An international study of home affordability has placed most Australian capital cities among the world's least affordable, with Sydney ranking the second worst globally.

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00:00For the first time in the 20-year history of Chapman University's Demographia study,

00:06a new category called Impossibly Unaffordable has been added and unfortunately Sydney is

00:11almost at the top of that list.

00:13In fact, nearly all Australian capitals fall within the top 25% of unaffordable markets

00:18in a list of 94 cities across 8 countries.

00:21To compare those markets, the study uses a metric which measures a middle-income household's

00:26ability to buy a median-priced home.

00:29Using that criteria, Hong Kong, Sydney and Vancouver are the most unaffordable markets

00:33for those buyers.

00:35Sydney was ranked the second most unaffordable city to buy a home and it's actually the 15th

00:40time in the past 16 years that it's made the top 3 global ranking.

00:44The study shows that house prices in Sydney are 14 times more than the average income.

00:49Some of our other capitals weren't far off.

00:51Melbourne ranked in at number 7 and Adelaide in at number 9.

00:55The study shows that all 5 of Australia's major housing markets have been severely unaffordable

01:00since the early 2000s.

01:02The latest data from the Australian Bureau of Statistics shows that in Australia, more

01:06than 210,000 dwellings are built every year, but for demand to match supply, that number

01:11needs to rise to roughly 240,000.

01:14An analyst recently told the ABC that median income owners would need to spend about 60%

01:20of their gross income to be able to purchase a median-priced home.

01:24The study says that much of the housing crisis stems from land use policies which are restricting

01:29supply and therefore driving up prices, so the study points to reforms which free up

01:34land for development as one solution for more affordable housing.

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