Sydney the second least affordable city in the world for housing: RiskWise
New research has ranked Sydney as one of the most unaffordable cities in the world – with Melbourne not far behind.
Property research firm RiskWise places Sydney second on its analysis and Melbourne 11th.
RiskWise CEO Doron Peleg said that the analysis looked at only units 105 square metres in size and not average-sized dwellings, like the Annual Demographia International Housing Affordability Survey does.
“The problem with Demographia's method is that it does not compare apples to apples,” Peleg said.
The Demographia survey ranked Hong Kong as the world’s least affordable city, followed by New York, Tokyo and London with Sydney was ranked 9th and Melbourne coming in at No.11.
Peleg said that in Hong Kong the average-sized unit is only 46 square metres, while in Sydney it is 105 square metres.
“Sydney and Melbourne are not as bad as first thought when compared to other cities,” he said.
“And yes, while in general families cannot afford a 105 square metre unit, the situation in other places is significantly more serious.
“Both Sydney and Melbourne, as global cities, could potentially be even less affordable.”
Peleg said that Victoria was ranked as more affordable sue to the greater supply of units and less capital growth.
"However, while in the last five years capital growth of units has been good, it has not been as good as Sydney,” stated Peleg.
Sydney prices have fallen 4.5% year on year, while Melbourne prices have also decelerated as lending restrictions and the Banking Royal Commission has clamped down on the market.
"The needs of families differ from those of singles and couples and many new apartments are not suitable, meaning there is an imbalance between the supply of units to the market needs,” Peleg said.
“Whether you take a world view or an Australian one, there appears to be a complete disconnect between the price of units suitable for families to the median household income.
“The people who own the majority of residential properties that are suitable for families are mainly higher income earners and investors.
“They are not standard household earners. They are, largely, people at the top 50% of income earners or investors who are cashed-up."
