If you want to buy a house, geography is one major factor that determines if you can afford one. Think tanks Urban Reform Institute and Frontier Centre for Public Policy evaluated housing markets for 92 metropolitan areas in eight countries to see how affordable they are.
Being able to buy became even more urgent for many buyers seeking to find a house that could help them balance life between remote schooling, working from home, and pandemic-driven lockdowns. Home prices are soaring in many markets, fueled in part by investment money, low interest rates, changes in home buying patterns, and lower inventory in many areas.
Related: Mapping the U.S. by Property Value and Land Area
The report, Demographia International Housing Affordability, analyzed housing affordability in markets around the world. The think tanks compared the ratio of median housing prices with median income in those markets.
Known as “median multiple”, housing is considered affordable if the median house price is three times or less than the median income. 3.1 to 4.0 is considered “moderately affordable, 4.1 to 5.0 is “seriously unaffordable”. and 5.1 and over is “severely unaffordable.”
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92 markets were evaluated in eight countries: Australia, Canada, China (Hong Kong only), Ireland, New Zealand, Singapore, United Kingdom, and the United States. Of those eight countries, only the United States had metropolitan areas in the affordable housing range. In the moderately affordable range, Canada, the United Kingdom, and the United States had housing markets. The other five countries analyzed only had metropolitan housing markets in the unaffordable ranges.
The Most Affordable Metropolitan Housing Markets in the World
Based on the study, the most affordable metropolitan housing markets are:
| Rank | Nation | Metropolitan Market | Multiple |
| 1 | U.S. | Pittsburgh, PA | 2.6 |
| 1 | U.S. | Rochester, NY | 2.6 |
| 3 | U.S. | Buffalo, NY | 2.9 |
| 4 | U.S. | St. Louis, MO-IL | 3 |
Rank of the Most Expensive Metropolitan Housing Markets in the World
The top eleven most expensive metropolitan housing markets based on the Demographia International Housing Affordability are:
11. London, England, United Kingdom (Greater London Authority) – 8.6
The capital and largest city in England is the eleventh most expensive housing market. The median house costs 8.6 times the median income. While the London housing market has been cooling during the pandemic, housing costs are still very high in this city.
10. Los Angeles, California, USA – 8.9
The tenth most expensive housing market is the Los Angeles metropolitan area. The median multiple to buy a house in the Los Angeles area is 8.9 times the median income.
A lack of adequate inventory has continued to make this area an expensive place to buy. DQNews, a real estate firm, reporting that the median house price for the six-county area in Southern California rose 16% from the previous year. February 2021 housing sales were 17.6% higher than the same time last year.
9. Honolulu, Hawaii, USA – 9.1
Honolulu’s housing market has continued to rise. The median multiple to buy a house in Honolulu is 9.1 times the median income.
The Hawaii Realtors Association February Report showed that the median housing price for the island of O’ahu is now $917,500 for a single family home. Overall, single family home prices for Hawaii have risen 20% over last year.
8. San Francisco, California, USA – 9.6
The tech driven Bay Area continues to be a hotspot for housing prices. It now costs 9.6 times the median income to buy a house in San Franciso, the most densely populated city in the United States.
While the pandemic drove an exodus of people from the Bay Area city, recent February sales show that the single home housing market in San Francisco is heating back up.
8. San Jose, California, USA – 9.6
This southern Bay Area city ties with San Francisco for the eighth most expensive housing market on the list. As with San Francisco, the median house price costs 9.6 times the median income in the area.
A suburban area, San Jose’s housing market rose in February 2021 compared to the previous year. Low inventory has continued to drive single family house prices up.
6. Melbourne, VIC, Australia – 9.7
Melbourne, the second most populous city in Australia after Sydney, is the sixth most expensive housing market. Analysts expect Melbourne housing prices to rise 16% this year, the largest increase since 2010.
5. Toronto, ON, Canada – 9.9
It takes 9.9 times the median income to buy a median house in Toronto, Canada. House sales in Toronto were up 97% this year compared to March of 2020. As buyers rebound from the pandemic-driven low of last year, low inventory is driving prices to rise an average of 21.6% in the area.
4. Auckland, New Zealand – 10.0
Buying a median priced house in Auckland costs ten times the median income. The median house price in Auckland is now $1,048,000 NZD, up 5.1% in the last three months.
3. Sydney, NSW, Australia – 11.8
Sydney is Australia’s largest regional housing market. Buying a median priced house costs 11.8 times the median income. After experiencing a 15.3% decline from July 2017 to May 2019, Sydney’s housing prices reached record highs this year. Sydney’s median house price is currently $1.1 million AUD.
2. Vancouver, BC, Canada – 13.8
The second-highest ranked city on the list, Vancouver’s median house price would costs a buyer 13.8 times the median income. Home sales in the Greater Vancouver area are up 126% over March of 2020.
1. Hong Kong, China – 20.7
For the 11th year in a row, Hong Kong tops the list as the least affordable city in terms of housing prices. A median house would cost some over 20 times the median income.
A very densely populated city, over 7.4 million people live in a 1,110.18 km2 (428.64 mi2) area. Based on 2019 population numbers, this is a density of 6,777 people per square kilometer, making Hong Kong one of the most densely populated cities in the world.
Based on government estimates in 2015, only 7% of the land in Hong Kong is residential. As a result, inventory is low while demand for housing is high, fueling the high housing prices that have earned Hong Kong the number 1 rank on this list.
Watch: 11 of the Most Unaffordable Cities in the World to Buy a House
