| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 Asia Economy


How to use our RSS feed

Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.


Finfacts is Ireland's leading business information site and you are in its business news section.


Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News


Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News




Content Management by interactivetools.com.

News : Property Last Updated: Jan 25, 2011 - 5:49 AM

International survey shows housing in Dublin and Cork is seriously unaffordable
By Michael Hennigan, Founder and Editor of Finfacts
Jan 24, 2011 - 6:12 AM

Email this article
 Printer friendly page

An international survey of 325 global housing markets shows that housing in Dublin and Cork -- the two biggest urban areas in the Republic of Ireland - -  is seriously unaffordable.

The 2011 Annual Demographia International Housing Affordability Survey (data 3rd Qtr 2010), published Monday, has been expanded to 325 urban markets of Australia (32 urban markets); Canada (35); Hong Kong, China (1); Ireland (5); New Zealand (8) United Kingdom (33) and the United States (211).

The report says for housing markets to rate as "affordable", housing should not exceed three times gross annual household income (the Median Multiple). If this "affordability threshold" is breached, it indicates local political impediments to the provision of affordable housing that need to be dealt with.

Housing markets are rated as "affordable" at or below 3 times gross annual household income (Median Multiple), "moderately unaffordable" at or below 4 times income, "seriously unaffordable" at or below 5 times income and above 5, rated "severely unaffordable".

The authors say that historically, the Median Multiple has been remarkably similar in Australia, Canada, Ireland, New Zealand, the United Kingdom and the United States, with median house prices having generally been 3.0 or less times median household incomes in the principal affordability indexes (historical data has not been identified for Hong Kong). This affordability relationship continues in many housing markets of the United States and Canada. However, the Median Multiple has escalated sharply in the past decade in Australia, Ireland, New Zealand, and the United Kingdom and in some markets of Canada and the United States.

In 2010, housing in Ireland overall was moderately unaffordable with a Median Multiple of 4.0. Housing was generally affordable in Ireland as late as the middle 1990s. In today's report, Dublin was the least affordable market with a Median Multiple of 4.8 and along with Cork (4.1) was seriously unaffordable. Three of Ireland’s five markets were moderately unaffordable, Waterford (3.2), Galway (3.6) and Limerick (4.0). Ireland had no severely unaffordable markets and had no affordable markets.

The 325 markets are ranked by housing affordability in Schedule 1. All of the 115 affordable markets (having a Median Multiple of 3.0 or below) were in Canada and the United States (Table 5). There were 106 affordable markets in the United States and 9 affordable markets in Canada. There were no affordable markets in Australia, Ireland, New Zealand or the United Kingdom.

The fast growing Atlanta, Georgia, USA is the most affordable of the 82 major metros, with housing prices at 2.3 times household income. Being an "open market," Atlanta over produced market priced housing, but did not bubble.

The median home price is the level at which half of all homes are sold for more and half are sold for less.

The most affordable major market (over 1,000,000 population) was Atlanta, with a median house price of $129,400, and a Median Multiple of 2.3. Indianapolis ($120,200) and Rochester ($121,500) tied for 2nd most affordable major market, at a Median Multiple of 2.4. Cincinnati, Cleveland and Detroit tied for 4th most affordable, with a Median Multiple of 2.5, followed by Buffalo, Las Vegas and St. Louis at 2.6. Eleven other US major markets were rated affordable, including fast growing Dallas-Fort Worth (2.7), Houston (2.9), Jacksonville (2.9) and Nashville (2.9).

All major markets in Australia and New Zealand, as well as Hong Kong were severely unaffordable.

Hong Kong ranked as the least affordable major market (82nd), with a median multiple of 11.4.

Sydney ranked second least affordable (81st), with a Median Multiple of 9.6, having slipped behind last year’s most unaffordable market, Vancouver at 9.5, which ranked 80th. Melbourne ranked 79th, with a Median Multiple of 9.0. Plymouth & Devon, San Francisco, London and Adelaide all had Median Multiples of more than 7.0 (Table 4).

Hugh Pavletich of New Zealand's Performance Urban Planning, the initiator and co-author of the Annual Demographia International Housing Affordability Survey says: "For metropolitan areas to rate as 'affordable' and ensure that housing bubbles are not triggered, housing prices should not exceed 3.0 times gross annual household earnings. To allow this to occur, new starter housing of an acceptable quality to the purchasers, with associated commercial and industrial development, must be allowed to be provided on the urban fringes at 2.5 times the gross annual median household income of that urban market (refer Demographia Survey Schedules for guidance)."

"The critically important Development Ratios for this new fringe starter housing should be 17 – 23% serviced lot - -  the balance the actual housing construction."

The fringe is the only supply / inflation vent of an urban market."

He said that there is a truism, well understood by responsible developers and real estate financiers internationally: "If you get the land price wrong  --  everything else is wrong."

Due to unnecessary politically inflated land costs, housing markets are "very wrong" in Hong Kong, Australia, New Zealand, the United Kingdom, Ireland and some parts of Canada and the United States.

Related Articles
Related Articles

© Copyright 2010 by Finfacts.com

Top of Page

Latest Headlines
Irish residential rents rise 9% as students face tight market conditions
Irish construction activity growth eased in July
Irish residential property prices fell in Dublin in June
Irish mortgage approvals growth fell sharply in April 2015
Irish land prices among highest in world; Noonan tax cut boosts Dublin prices
AIB cuts Irish variable mortgage rates
Dublin residential property prices rose by 1.1% in March
Global property bubble: Dublin tops 2014 global returns at 44.7%
New Irish housing units in 2015 forecast at only 10,000
Ireland: Dublin house prices up 21% in year to February 2015 after price decline in month
Prime office rents in Dublin to rise by up to 31% in 2015 after 29% surge in 2014
Irish mortgages paid in 2014 at 1976 level; Half of house sales paid in cash
Irish residential property prices fell 1.4% nationwide in January
Irish House Rents: Supply tightens in Dublin's commuter counties in Q 42014
Irish commercial property returns in 2014 among highest in world
Irish Housing: "Unique" demographics to boost demand; Shortages to rise
Irish mortgage approvals in 2014 at 36-year low; Exceed paid loans
Irish commercial property investment in 2014 was 25% above bubble peak in 2006
Irish construction continues to rise from very low base
Irish house asking prices fell back slightly in fourth quarter of 2014
Price/Earnings multiple for Dublin houses is double 1993 level
Residential property rents up almost 10% in Dublin in past year
Irish Government and vested interests lobby for easing of Central Bank's mortgage rules
Ireland tops global property price rankings six years after bust
Number of Irish mortgages paid in 2014 at 1974/75 level - a 40 year-low
Irish construction PMI survey confidence measure highest since 2000
Irish mortgage arrears decline; 38,463 BTL accounts in arrears
Irish Housing: Renting provides less security than ownership, unpredictable rents
Ireland: NAMA to redeem €1bn of senior bonds; Fund Boland’s Mill site development
Ireland: 35,000 social housing units by 2020 achievable; Rental market possibly not
Dublin house prices up 24.1% in year to October 2014
Irish home ownership to fall due to affordability
'Tara Collection' of office buildings on sale in Dublin for €263.8m
Irish Housing Rents 2014: Dublin just 10% short of 2007 bubble peak
Irish Economy: Residential mortgage approvals in 2014 as low as in 1977
Irish Construction: Fastest rise in new business for decade - not level of activity
Biggest US individual landowner responds to tax breaks in Ireland and UK
Irish commercial property annual return to September 2014 at 36.6% - income at global high
NAMA expects surplus of less than €500m - it's not a profit; 88.5% sales to US investors
NAMA selling 588 Dublin apartments - name withheld in announcement