13th Annual
Demographia International
Housing Affordability
Survey: 2017
Rating Middle-Income Housing Affordability
Australia Canada China (Hong Kong) Ireland
Japan New Zealand Singapore
UnitedKingdom UnitedStates
Introduction
Housing Affordability: A Social Imperative
Oliver Hartwich, Executive Director,
The New Zealand Initiative
Demographia’s reports and countless other surveys and studies do not leave the slightest doubt
that unaffordable housing is almost everywhere and every time caused by the same factor:
housing supply restrictions. The more restrictive the market, the more prices will increase over
time.
To any undergraduate student of economics, this will not come as a surprise. But it is still a relatively novel discovery for many planners and politicians.
To any undergraduate student of economics, this will not come as a surprise. But it is still a relatively novel discovery for many planners and politicians.
Fortunately, the media are waking up to the realisation that housing and land supply matters. The
most powerful infographic of 2016 was produced by The Wall Street Journal. It showed what
happened to house prices in US cities that had expanded their residential areas between 1980 and
2010 – and those that had not.1 As was to be expected, greater land supply went hand in hand
with lower price increases.
Senator Bob Day AO
Senate of Australia
The distortion in the housing market... resulting from the
supply-demand imbalance is enormous ... and affects every
other area of a country’s economy. New home owners pay a
much higher percentage of their income on house payments than
they should.
However, the real culprit ... was the refusal of ... governments ... to provide an adequate and affordable supply of land for new housing stock to meet demand. ... the "scarcity" that drove up land prices is wholly contrived - it is a matter of political choice, not geographic reality. It is the product of restrictions imposed through planning regulation and zoning.
However, the real culprit ... was the refusal of ... governments ... to provide an adequate and affordable supply of land for new housing stock to meet demand. ... the "scarcity" that drove up land prices is wholly contrived - it is a matter of political choice, not geographic reality. It is the product of restrictions imposed through planning regulation and zoning.
Dr. Shlomo Angel
New York University
We all understand what it means to prepare adequate lands
for urban expansion, enough land to accommodate both
residences and workplaces, so as to ensure that land—and
particularly residential land—remains affordable for all.
Unfortunately, municipalities of many rapidly growing cities often underestimate the amount of land needed to accommodate urban expansion. In the minority of cases where expansion is effectively contained by draconian laws, it typically results in land supply bottlenecks that render housing unaffordable to the great majority of residents.
Unfortunately, municipalities of many rapidly growing cities often underestimate the amount of land needed to accommodate urban expansion. In the minority of cases where expansion is effectively contained by draconian laws, it typically results in land supply bottlenecks that render housing unaffordable to the great majority of residents.
For cities to expand outward at their current pace ─ to
accommodate their growing populations or the increased demand
for space resulting from higher incomes ─ the supply of land
must not be artificially constrained.
The more stringent the restrictions, the less is the housing market able to respond to increased demand, and the more likely house prices are to increase. And when residential land is very difficult to come by, housing becomes unaffordable.
The more stringent the restrictions, the less is the housing market able to respond to increased demand, and the more likely house prices are to increase. And when residential land is very difficult to come by, housing becomes unaffordable.
Alain Bertraud
New York University
It is time for planners to abandon abstract objectives and to
focus their efforts on two measurable outcomes that have always
mattered since the growth of large cities during the 19th century’s
industrial revolution: workers’ spatial mobility and housing
affordability.
As a city develops, nothing is more important than maintaining mobility and housing affordability. Mobility takes two forms: first, the ability to travel in less than an hour from one part of a city to another; and second, the ability to trade dwellings easily with low transactions costs.
As a city develops, nothing is more important than maintaining mobility and housing affordability. Mobility takes two forms: first, the ability to travel in less than an hour from one part of a city to another; and second, the ability to trade dwellings easily with low transactions costs.
Hon. Bill English
Deputy Prime Minister (Now Prime Minister)
New Zealand
Housing affordability is complex in the detail – governments
intervene in many ways – but is conceptually simple. It costs too
much and takes too long to build a house in New Zealand. Land
has been made artificially scarce by regulation that locks up land
for development. This regulation has made land supply
unresponsive to demand.
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Robert Bruegmann, PhD
University of Chicago
... I think it is fair to say that a growing number of people
who have looked at the figures have tended to agree that a good
many well-meaning policies involving housing may be pushing up
prices to such an extent that the negative side-effects are more
harmful than the problems the policies were intended to correct.
Joel Kotkin
Chapman University
Although usually thought of as “progressive” in the English
speaking world, the addiction to “smart growth” can more readily
be seen as socially “regressive”. In contrast to the traditional
policies of left of center governments that promoted the
expansion of ownership and access to the suburban “dream” for
the middle class, today regressive “progressives” actually advocate
the closing off of such options for potential homeowners.
Dr. Tony Recsei
Save Our Suburbs, Sydney, Australia
During the 18th century, especially after the industrial
revolution, rural dwellers desperate to make a living streamed into
the cities, converting many areas into overcrowded slums.
However, as the new economic order began to generate wealth,
standards of living improved, allowing an increase in personal
living space.
Unless we are vigilant, high-density zealots will do their best to reverse centuries of gains and drive us back towards a Dickensian gloom.
Unless we are vigilant, high-density zealots will do their best to reverse centuries of gains and drive us back towards a Dickensian gloom.
Dr. Donald Brash
Former Governor, Reserve Bank of New Zealand
...the affordability of housing is overwhelmingly a function of
just one thing, the extent to which governments place artificial
restrictions on the supply of residential 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...
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...
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2.2: All Housing Markets
Among the 406 markets, Ireland has the most affordable housing with a national Median Multiple of 3.4 (moderately unaffordable). The United States is second (3.5), followed by Canada (3.9). Japan (4.1), the United Kingdom (4.6) and Singapore (4.8) are all rated seriously unaffordable. The least affordable markets are China (Hong Kong), at 18.1, Australia (5.5) and New Zealand (5.7), both
severely unaffordable (Figure 5 and Table 8).
Among all markets, 99 are affordable (Median Multiple of 3.0 or less). There are 116 moderately unaffordable markets (Median Multiple of 3.1 to 4.0) and 97 seriously unaffordable markets (Median Multiple of 4.1 to 5.0). A total of 94 markets are severely unaffordable, with a Median Multiple of 5.1 or higher.
(Well, at least we aren't as bad as Hong Kong!)
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