It’s harder than ever to get your foot on the first rung of the property ladder, not just with the cost of the property itself, but also additional costs such as bills and home & contents insurance.
But how does the affordability of housing look around the world?
Earnings and house prices vary a lot from one country to the next, so which works out as the most and least affordable to buy a home in?
To find out, we looked at average property prices per square metre and average disposable household income to calculate the cost per square metre as a percentage of annual income.
#1
The most affordable of the nations that we looked at was Turkey, which had the lowest price per square metre (A$1,131), which with an average household income of A$27,087, means an affordability ratio of just 4.2%.
#2
Despite having a much higher property price of A$3,683 per square metre, the USA was the second most affordable country, as it has a higher average income (A$67,020), for a ratio of 5.5%.
#3
Other affordable countries on the list included Russia (5.9%), South Africa and Mexico (both 7.3%).
#1
On the other hand, the country where you’d struggle the most to buy a house is South Korea. South Korea is known for its high cost of living, with an average property cost of A$12,810 per square metre, but an average household income of A$32,385, which means it has the highest affordability ratio on our list, 39.6%.
#2
Following this was Israel, where the average household income was slightly higher (A$36,797), although property prices were a bit lower too (A$9,780), for an affordability ratio of (26.6%).
#3
The next three least affordable nations on the list are all known for having a high cost of living: Switzerland (26.5%), Luxembourg (23.7%) and Japan (23.2%).
|
Rank |
Country |
Avg. Disposable Household Income |
Avg. Price per m2 |
House Price (per m2) to Income % |
House Price (per m2) to Income % |
House Price (per m2) to Income Ratio (% GRAPH) |
|---|
Key: House Price (per m2) to Income Ratio
0-10% 10.1-15% 15.1-20%20.1-25%25.1%+We calculated the house price to income affordability ratio by dividing the average property price per square metre by the average disposable household income.
Average property price per square metre
Sourced from Numbeo (taking an average of the figures for properties in and outside city centres).
Average disposable household income
Sourced from the OECD’s Better Life Index which gives the average net adjusted amount that a household earns per year, after taxes.
All currency figures were converted from US dollars to Australian dollars as of 01/06/2020.
