Irish house prices have now nearly returned to
normal affordability, following the housing bubble while Vancouver overtook Sydney as the least-affordable housing market after Hong
large English-speaking cities, as
rose faster than incomes, an international study of 325 metropolitan areas
The Annual Demographia International Housing
Affordability Survey’s rate housing affordability, based on the Median Multiple
- - that is, the median house price divided by the gross annual median household
income of specific urban markets, for the 3rd quarter of the previous year.
The authors say “median multiple” is a robust
measure - - essential for the basic understanding of the structural health (or
otherwise) of a specific urban market. If housing prices exceeds 3.0 times
annual household income (Median Multiple), it illustrates that there are serious
political impediments that need to be addressed, to the normal supply of new
housing on the fringes of the specific distressed urban markets.
The fringes of an urban market are the only
effectively responsive supply or inflation vents.
In Ireland, Dublin and Limerick were the least
affordable markets with a Median Multiples of 3.4. Waterford (2.8) and
Galway (3.0) were rated as affordable, the first such ratings in Ireland and the
first outside Canada and the United States in the history of the Demographia
International Housing Affordability Survey. For the first time, Ireland had no
seriously unaffordable and no severely unaffordable markets. Ireland is the only
nation without metropolitan markets in the severely unaffordable and seriously
unaffordable categories (Table 9).
Wendell Cox and Hugh Pavletich say that while
Hong Kong is the most severely unaffordable housing at a staggering 12.6 Median
Multiple (the highest ever recorded within the history of the Surveys) - -
Australia with its abundant land supply has the most pervasive housing
affordability problem (5.6 MM); followed by New Zealand with a small population
of just 4.4 million (5.2 MM); the United Kingdom (5.1 MM); Canada (3.5 MM);
Ireland with its housing bubble collapsing (3.4 MM) while the United States
overall is affordable (3.0
Large swathes of middle North America did not
experience urban governance and planning failure and unnecessary housing bubbles
through this past decade. They remained throughout, healthy and normal housing
markets (other than some within the “rust belt”). Normal healthy urban markets
through the building cycle, should oscillate within the2.0 to 3.0 Median
Multiple range. Generally (unless there is serious over production of new stock,
such as the open market of Atlanta), it indicates a distressed urban market
experience severe economic adversity, if it falls below the 2.0 Median Multiple.
Annual Demographia International Housing Affordability Survey
Check out our new
subscription service, Finfacts Premium
, at a low annual charge of €25 - - if
you are a regular user of Finfacts, 50 euro cent a week is hardly a huge ask to
support the service.
It's a simple fact that in the
prevailing economic climate, the provision of high quality content cannot be
sustained through advertising alone.
Business executives who put a
premium on time and value high quality information, should use our service.