NEW YORK – Jan. 28, 2011 – United States real estate offers a lot of bang for your buck, according to a new survey that shows U.S. homes are the cheapest relative to incomes among English-speaking nations.
Australian homes – which have a median price of $454,000 – were found to be the most unaffordable among English-speaking nations, according to the report by consulting firm Demographia, which examined affordability in the third quarter of 2010. The median home in Australia costs 6.1 times the gross annual median household income. What’s more, 85 percent of the homes in Australia’s major cities were more than 5.1 times average income, according to the survey.
On the other hand, U.S. homes have a median home price of $168,000 and homes cost only three times yearly income or less.
Australia has gone from being “the exemplar of modestly priced, high-quality middle-class housing, to now the most unaffordable housing market in the English-speaking world,” the report noted. “Each of the least affordable markets were characterized by more restrictive land use regulation, which materially increases the price of land and makes housing less affordable.”
The priciest city for real estate, in general: Hong Kong, with homes costing 11.4 times income. (The report considers any markets where home prices are 5.1 times household income or more very unaffordable.) Prices in Hong Kong have increased by more than 50 percent in the past two years due to low interest rates, an expanding economy and buyers flooding in from China.
The United States boasted the most affordable major markets. Atlanta was the most affordable big city, in which the median home price is $129,000.
Meanwhile, the most unaffordable markets in the U.S. were mostly found in California: San Francisco (homes cost 7.2 times income), San Jose (6.7 times), San Diego (6.2 times), New York (6.1 times), and Los Angeles (5.9 times).
Source: “U.S. homes most affordable in English-speaking – except in S.F. and S.J.,” Bloomberg News (Jan. 24, 2011)