Canberra: Surging house prices in Australia’s largest cities has contributed to the nation being the second least-affordable country to buy a house, a report revealed on Monday.
Runner-up to only Hong Kong, the results of a study by Demographia revealed that the typical Australian house costs 5.6 times the median household income, Xinhua news agency reported.
The study also showed that in 2016, in Australia’s largest city, Sydney, the house price-to-income ratio had suffered the largest annual increase in the study’s 12-year history.
As of 2016, a typical house in Sydney will set a homeowner back an average of 12.2 times their wage, up from 9.8 times their income in 2014.
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The results showed that Sydney was now the second least affordable city after Hong Kong followed by the Canadian city of Vancouver, and then another Australian city, Melbourne, at 9.7.
Demographia purportedly believe that a house price-to-income ratio of 5.1 or more is considered “severely unaffordable”, meaning other Australian cities Perth (6.6), Adelaide (6.4) and Brisbane (6.1) were all in that category.
Senator Bob Day, who wrote the introduction of the report, said zoning restrictions and other building regulations were pushing prices higher in major cities.
“It is important to remember that the ‘scarcity’ that drove up land prices is wholly contrived – it is a matter of political choice, not geographic reality,” Day said.
“It is the product of restrictions imposed through planning regulation and zoning.”