In what will decried by the industry, Sydney and Melbourne have ranked amongst the ten most expensive housing markets in the world according to the Global Property Guide:
Recently, a list of the world’s 10 most expensive cities for travelers and employees has been released by The Economist’s Intelligence Unit (via CNN) based on the cost of essential everyday items. According to this list, Tokyo is the most expensive city in the world. So, in the case of travelers thinking about becoming the residents of one of these cities it’s a real necessity to know the proportion between home prices and average local incomes.
Point2 Homes analysts reviewed the same list from a different perspective (the homebuyer’s perspective) and different rankings resulted…
10. Melbourne
Number 10 in the Point2 Homes ranking is Melbourne, where housing market grew stronger at the end of 2012, due to the rebound of both demand and home prices. With only 40 housing bargains ($200,000 and under) in the previous year, and a median home price of $246/sqft compared to a $3,979 average monthly income, Melbourne has earned its place in the list of the most expensive cities to settle down in.
9. Sydney
Sydney shares some similarities with Melbourne, as the housing market also grew stronger, but recorded its highest ever median home price ($404/sqft). The record together with its $4,517 average monthly income puts the city among the most expensive property markets in the world.
While I am not too surprised that Sydney and Melbourne have been ranked amongst the world’s most expensive housing markets, I am surprised that Vancouver (Canada), Hong Kong, and some Chinese cities didn’t make the list ahead of the Australian cities. Such glaring omissions suggest that the actual rankings in these types of surveys should be taken with a grain of salt.
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To be sure, Sydney and Melbourne housing is expensive. But whether they are amongst the ten most expensive markets in the world is questionable.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
