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Anybody attempting to buy a house in this day and age will be aware of the financial hurdles that often block a successful property purchase. Even more so if the place you want to live is in a city. The global housing market is bloated with super expensive real estate, most of it way out of reach for those hoping to get a foot on the urban property ladder. But now, according to a recently published report, some cities have been labeled as “impossibly unaffordable" such is the skyrocketing prices asked for even the smallest of homes. That's bad news for anyone hoping to settle in a country capital or a large metropolis. But what cities are we talking about, and why are costs so high?
Click through and survey this list of the unaffordable—and slightly more affordable—cities in the world.
The annual Demographia International Housing Affordability report has been tracking house prices for some 20 years.
The 2024 edition of the report features a new category that labels some major cities as "impossibly unaffordable."
The report compared average incomes with average home prices across a range of international property markets.
To calculate figures, Demographia used the median multiple, a price-to-income ratio that divides the median house price by the gross median household income.
Housing is usually the most expensive element of household budgets. The deterioration of housing affordability has been the principal driver of the present cost of living crisis affecting the middle and working classes, notes the report.
House prices slumped during the pandemic in 2020, the report adds. But in the wake of the COVID-19 lockdowns, housing affordability remained severely challenged across most markets in 2023.
Exacerbating the crisis is the escalation of land costs. The cost of living is higher where land use regulation is the most restrictive at the housing market (metropolitan area) level.
Using the price-to-income ratio, these are the Demographia ratings used in the report: Affordable = medium multiple of 3.0 & 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 & over.
Besides listing the 10 most impossibly unaffordable cities in the world, Demographia has also spotlighted the 10 most affordable cities (relatively speaking) in the world. So, using the previously referenced rating index, let's take a look at these first in ascending order.
Brisbane, the capital of the state of Queensland, has a medium multiple of 7.4. It makes this list because while severely unaffordable, Brisbane is still one of the cheapest cities in Australia to live in.
At number nine is Perth, the capital city of Western Australia. It has a medium multiple of 5.4, which is also a pretty good rating for an Australian city.
Glasgow, the most populous city in Scotland, rates at eight in the rankings with a medium multiple of 3.9.
Blackpool, a historic seaside town in Lancashire, England, comes in at seventh place with a medium multiple of 3.8.
The surprise entry on this list is Singapore. With a medium multiple of 3.8, the city-state ranks sixth in the table. Singapore's median multiple has improved by adjustments to account for the longstanding and broad based first home buyer grant (initiated three decades ago), explains the report.
In fifth place with a medium multiple of 3.6 is the Canadian city of Edmonton, the capital of the province of Alberta.
A close fourth is Cleveland in Ohio. This American city set along the southern shore of Lake Erie has a medium multiple of 3.5.
Staying in the United States, in third place is Rochester, in New York. It has a medium multiple of 3.4.
The city of St. Louis in the US state of Missouri also has a medium multiple of 3.4, but is placed second because it has a greater population than Rochester.
And taking the number one spot on the most affordable housing list is Pittsburgh, in Pennsylvania. It has a medium multiple of 3.1, which makes this US city one of the cheapest in the world in which to buy property.
Now it's time to find out where in the world buying a home is the most difficult. Again, cities are listed in descending order.
In 10th place on the impossibly unaffordable list is the Canadian city of Toronto. It has a medium multiple of 9.3.
At number nine is San Diego, in the US state of California. Its medium multiple is 9.5.
Tied for eighth place is San Francisco and Adelaide. The American and Australian cities both have a medium multiple of 9.7.
And we stay in Australia for Melbourne, the capital of Victoria. This city has a medium multiple of 9.8.
Back across the world to the United States, where in California we have Los Angeles tipping the balance with a medium multiple of 10.5.
The Hawaiian capital of Honolulu has a medium multiple of 10.9.
California's reputation as an expensive state to reside in is confirmed with San Jose's medium multiple of 11.9. Its ranking is due in part to the city's proximity to Silicon Valley.
North of the border and back in Canada, Vancouver comes in third place with a medium multiple of 12.3.
The second most difficult city in which to secure housing is Sydney. This Australian city of nearly 5.5 million has a medium multiple of 13.8.
And the least affordable market in the Demographia International Housing Affordability report? That title goes to Hong Kong. Its medium multiple is a staggering 16.7.
Sources: (Demographia) (Global Property Guide)
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LIFESTYLE Housing
Anybody attempting to buy a house in this day and age will be aware of the financial hurdles that often block a successful property purchase. Even more so if the place you want to live is in a city. The global housing market is bloated with super expensive real estate, most of it way out of reach for those hoping to get a foot on the urban property ladder. But now, according to a recently published report, some cities have been labeled as “impossibly unaffordable" such is the skyrocketing prices asked for even the smallest of homes. That's bad news for anyone hoping to settle in a country capital or a large metropolis. But what cities are we talking about, and why are costs so high?
Click through and survey this list of the unaffordable—and slightly more affordable—cities in the world.