Aussie beach houses, LA homes among world’s least affordable

SYDNEY: Los Angeles houses are the least affordable in the English-speaking world, but if you think an Australian beach home may be cheap, think again — the coastal town of Mandurah is the sixth least affordable place to buy.

US firm Demographia’s study of international housing affordability in six nations found that while the US had the top 5 least affordable cities, along with Canada it had the affordable housing markets. In contrast, none of the urban markets surveyed in Australia, Ireland, UK and New Zealand were affordable.

The survey of 227 cities set affordability at a maximum of 3 times median household earnings, while severely unaffordable houses cost 5.1 or more times median household earnings. To buy a house in LA costs almost 4 times what is considered affordable, 11.5 times median household earnings, while a house in Mandurah on the coast of Australia cost 9.5 times median earnings. Australia’s biggest city Sydney ranked 11th least affordable, costing 8.6 times a household’s average annual income.

The survey said the main factor in affordability was availability of land. “Australia is perhaps the least densely populated major country in the world, but state governments there have contrived to drive land prices in major urban areas to very high levels, with the result that in that country housing in major state capitals has become severely unaffordable,” Donald Brash, former New Zealand central bank chief, said.

Houses in Canada were the most affordable, with residents requiring only 3.1 years of annual income to purchase a house.