The housing market has become increasingly challenging for potential homebuyers in many countries, including the United States. A recent report has designated some major cities as “impossibly unaffordable” due to the comparison of average incomes with average home prices. Factors such as pandemic-induced demand for homes with outside space, land use policies restricting urban sprawl, and increased investor activity have led to soaring prices.
In the United States, cities on the West Coast and Hawaii have been ranked among the top 10 most unaffordable places to buy a home. Notably, California cities like San Jose, Los Angeles, San Francisco, and San Diego have made the list. Honolulu in Hawaii also ranks sixth among 94 major markets surveyed in eight countries.
Australia, alongside the US, dominates the list with cities like Sydney, Melbourne, and Adelaide being labeled as “impossibly unaffordable.” However, Hong Kong surpasses all other cities globally in terms of unaffordability, known for its compact living spaces and high rents.
Despite being the least affordable city worldwide, Hong Kong saw a slight decline in house prices during the pandemic in 2020. The report attributes the surge in house prices to a combination of factors such as working from home, urban containment policies, and investor speculation.
To address the affordability crisis, the report suggests looking to New Zealand as a model. New Zealand’s policy of zoning for 30 years of housing growth has shown positive results and advocates for other countries to follow suit.
Cities like Vancouver and Toronto in Canada are also highlighted as being “impossibly unaffordable.” The report identifies more affordable cities worldwide, including Pittsburgh, Rochester, and St. Louis in the US; Edmonton and Calgary in Canada; Blackpool, Lancashire, and Glasgow in the UK; and Perth and Brisbane in Australia.
The report was compiled by researchers from the Center for Demographics and Policy at Chapman University in California and the Frontier Centre for Public Policy in Canada. It sheds light on the growing challenges of housing affordability in major cities around the world and offers potential solutions to address the issue.