Hong Kong view hill
Hong Kong remains by far the most unaffordable city – twice as unaffordable as the two largest Australian Cities. Image: Robert Bye, Unsplash
  • Hong Kong remains at the top by far
  • Sydney and Melbourne third and fourth place
  • A surprise addition is Adelaide at 13th place

The list, piled by using Illinois-based Demographia data, is designed to look at the most expensive housing markets specifically for middle-income earners across 309 metropolitan areas. It achieves this by comparing household incomes and homeownership.

Under the formula used, any city with a score above 5.1 is deemed severely unaffordable.

Hong Kong, which takes the top spot, has a score of 20.8.  One in five residents currently lives in poverty and nano apartments have become popular in the past decade.

Next is Vancouver which has a lower a score of 11.9, the same data reveals that a median-income earning household in the British Columbian city needs to use all of their pre-tax income to afford a typical median-priced detached house.

With scores of 11.0 and 9.5 respectively, Sydney and Melbourne are next. Though the two largest cities in Oceania have about half the score of Hong Kong each, it should be noted that both still have a score twice as high as what is rated as severely unaffordable.

Across the ditch, Auckland has a score of 8.6, which makes it equal sixth place sharing the honours with Toronto.

Adelaide is 13th with a score of 6.9, the same as Bournemouth and Dorsett in the UK and just below San Diego in Calfiornia.

San Francisco, Los Angeles, San Jose, San Diego and Honolulu are the American cities featured in the top part of the list.

Unaffordability is so severe that in these five cities, only 3% of middle-class households have income high enough to qualify for a mortgage.

Interestingly, cities renowned for being expensive such as New York and Singapore aren’t mentioned in the piece; a factor in this may be the fact it is based on middle-income earners as opposed to the general population.

However, a concerning factor about this data is much of it was compiled just before the pandemic hit.

Domestically, we know Melbourne and Sydney house prices have since risen, the pandemic has had much of a greater impact in the UK and US than in Australia – both from a health and economic point-of-view.

Therefore, it wouldn’t be unwise to suggest unaffordability may have increased for these cities.

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