To the World, U.S. Real Estate Is a Good Deal

July 7, 2015

U.S. housing markets are the most affordable in the world, at least according to a recent study of more than 300 metro housing markets in nine countries conducted by the research group Demographia. 

U.S. housing markets were found to be more affordable than Canada, the United Kingdom, Ireland, Australia, New Zealand, Singapore, Japan, and China. 

Researchers measured affordability by taking a look at median home prices and median household incomes. A market was rated "unaffordable" if it had a calculated value of higher than 3.0 and was "severely unaffordable" if above 5.1. 

The U.S. markets analyzed showed a lot of variation -- such as Detroit at the bottom with a 2.1 value while San Francisco had a 9.2 value. Still, the U.S. averaged 3.4 as a whole, making it more affordable than other countries. 

Hong Kong, on the other hand, was the priciest and at a record high on the survey. The survey found that even if a household could direct all of its household income toward buying a home, it would still take 17 years before the household could afford to buy. To live on Hong Kong Island alone, a resident would pay about $900 in U.S. currency for just a 150-square-foot apartment. Hong Kong is the most densely populated places across the globe; it holds 6,845 people per square kilometer. New York, as comparison, hold 2,050. 

Hong Kong also had the smallest homes in the study, with the average size of a new home at just 484 square feet. 

The study found the following major markets were the most unaffordable: 

  1. Hong Kong
  2. Vancouver
  3. Sydney
  4. San Francisco
  5. San Jose
  6. Melbourne
  7. London

Source: "Think Housing Is Pricey in America? Be Glad You’re Not in Hong Kong,"® (June 26, 2015)