Demographia, a research firm, has just released its fourth annual international housing affordability survey, and it’s worth a look. Especially since, unlike some similar surveys, it’s free on the Internet. Click here to see it.
The survey, which compares prices with local incomes, concludes that Los Angeles is the world’s most unaffordable market. California in generally is highly unaffordable, it says, along with Hawaii, the East Coast, Australia, the United Kingdom, New Zealand, and British Columbia. Pictured above is a nice house in Sydney, Australia, from the Sydney Morning Herald.
Canadian and U.S. cities top the list of more affordable areas. Among the bigger ones that Demographia considers affordable are Atlanta, Dallas, and Ottawa.
In an introduction to the survey, Donald Brash, former governor of the Reserve Bank of New Zealand, says that “the affordability of housing is overwhelmingly a function of just one thing, the extent to which governments place artificial restrictions on the supply of residential land.” Case in point for him is Australia, which is mostly empty yet still has high house prices because of restrictive zoning laws.
The report was written by Wendell Cox, a housing consultant in Belleville, Ill., and Hugh Pavlevitch of Pavlevitch Properties Ltd. in Christchurch, New Zealand.
By the way, Pavlevitch didn’t think much of my recent cover. Here’s what he wrote in a press release:
This follows hard on the heals of the recent “floundering effort” by US Businessweek in another irresponsible headline grabber Housing Meltdown - which missed the real market drivers completely ….
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.