Photo by Catarina Sousa
A recent global study has highlighted the severe housing affordability crisis in Australia, with Sydney and Melbourne ranking among the top ten most unaffordable cities worldwide. The 2025 Demographia International Housing Affordability report, conducted by Chapman University’s Centre for Demographics and Policy, reveals that five Australian cities are among the top 15 least affordable housing markets globally.
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📉 Australia’s Housing Affordability Rankings
The report assesses housing affordability by comparing median house prices to median household incomes across 95 major housing markets in eight countries. The findings for Australian cities are as follows:
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Sydney: Ranked 2nd most unaffordable city globally, with a median house price 13.8 times the median household income.
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Melbourne: Ranked 9th, with a median multiple of 9.7.
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Adelaide: Ranked 6th, with a median multiple of 10.9.
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Brisbane: Ranked 11th, with a median multiple of 9.3.
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Perth: Ranked 14th, with a median multiple of 8.3.
These figures indicate that housing in these cities is classified as “impossibly unaffordable” or “severely unaffordable,” with median multiples well above the threshold of 5.1.
Sydney, Melbourne, Brisbane, Adelaide and Perth all featured in the top 15 least affordable cities worldwide
🏘️ Factors Contributing to Unaffordability
The report attributes the housing affordability crisis in Australia to several key factors:
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Urban Containment Policies: Restrictive planning and land-use policies limit housing expansion on the urban fringe, leading to inflated land prices.
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Surging House Prices: Since the 1990s, house prices have significantly outpaced household incomes, eroding middle-income homeownership.
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Ineffective High-Density Housing: The report questions the effectiveness of high-density housing in improving affordability, noting that such housing may remain too expensive or unattractive to most middle-income earners.
Sydney has ranked as the second least affordable city in the world, behind only Hong Kong
📊 Global Context
The 2025 Demographia report reveals that none of the 95 major housing markets analyzed across eight nations qualify as “affordable.” This marks the first time in the report’s 21-year history that no market meets the affordability criteria.
In comparison to other global cities:
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Hong Kong: Ranks as the least affordable city, with a median multiple of 14.4.
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San Jose: Ranks 3rd, with a median multiple of 12.1.
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Vancouver: Ranks 4th, with a median multiple of 11.8.
These rankings highlight the severity of Australia’s housing affordability crisis in a global context.
🔍 Conclusion
The 2025 Demographia International Housing Affordability report underscores a pressing issue in Australia’s major cities, where housing has become increasingly unattainable for middle-income earners. Addressing this crisis will require comprehensive policy reforms aimed at increasing housing supply, revising urban planning strategies, and ensuring that housing development aligns with income growth.
Urban containment policies have driven up land prices on the edges of major Australian cities, the report stated
SOURCE: THE DAILY MAIL