Domainfax’s Matt Wade posted an article over the weekend blaming the high cost of housing in Australia on the concentration of the population in Sydney and Melbourne:
Sydney and Melbourne are among the world’s most successful cities. Together they generate more than 40 per cent of Australia’s economic output and both consistently rate among the most liveable cities on the planet. But their sheer magnetism has contributed to a pressing national challenge: the high cost of housing.
The demographic dominance of these twin urban giants helps explain why property prices in Australia are high when compared with most other countries…
The most recent population estimates by the Bureau of Statistics showed 9.3 million people live in Sydney and Melbourne, or four in every 10 Australians…
Japan’s two largest cities, Tokyo and Yokohama, account for less than 10 per cent of the total population. London and Birmingham, Britain’s two biggest cities, make up less than 20 per cent of the population…
Australia has a relatively small population of around 24 million people, or roughly 1/13th that of the United States. Moreover, none of Australia’s cities are large by global standards.
For example, Greater Sydney (population 4.9 million when outlying areas like the Blue Mountains and the Central Coast are included) wouldn’t even scrape into the top 10 largest metropolitan areas in the United States. It also pales in comparison to Greater London (8.6 million) or Tokyo (38 million).
And yet Australia’s residential land/house prices are absurd by global standards, running well above most other countries where land supply is genuinely scarce.
To make matters worse, it’s not just the big cities in Australia that are overly expensive. According to Gerard Minack, every city in the Anglo world with a population of less than 100,000 and house prices over five times median income is in Australia:
The unfortunate truth is that Australian housing is ridiculously unaffordable across-the-board.