House prices have fallen so much they have now reached affordable levels for thousands on average salaries, a major new study claims
The international study of 325 metropolitan areas worldwide shows that house prices in Ireland have now nearly returned to normal affordability following the housing bubble.
The Annual Demographia International Housing Affordability Survey’s rate housing affordability is based on the Median Multiple. The Median Multiple is the average house price divided by the gross annual median household income of specific urban markets for the third quarter of the previous year.
If house prices exceed three times the annual household income (Median Multiple), it illustrates that there are serious political impediments that need to be addressed, to the normal supply of new housing on the fringes of the specific distressed urban markets.
In Ireland, Dublin and Limerick were the least affordable markets with Median Multiples of 3.4. Waterford (2.8) and Galway (3.0) were rated as affordable, the first such ratings in Ireland and the first outside Canada and the United States in the history of the Demographia International Housing Affordability Survey.
For the first time, Ireland had no seriously unaffordable and no severely unaffordable markets. Ireland is the only nation without metropolitan markets in the severely unaffordable and seriously unaffordable categories.
Wendell Cox and Hugh Pavletich say that while Hong Kong is the most severely unaffordable housing at a staggering 12.6 Median Multiple (the highest ever recorded within the history of the surveys), Australia with its abundant land supply has the most pervasive housing affordability problem (5.6 MM) followed by New Zealand (5.2 MM). Close behind is the the United Kingdom (5.1 MM) and Canada (3.5 MM) followed by Ireland (3.4 MM) while the United States overall is affordable at 3.0 MM.