Finding an affordable home is becoming increasingly difficult, not just in 1 or 2 big cities, but around the world. A new report reveals the cities where this struggle is most prominent, including the top five least affordable metropolitan areas in the United States.

The annual Demographic International Housing Affordability report has been tracking housing costs for two decades. This year’s edition identifies the top 10 most expensive housing markets globally, alongside the most affordable ones.

Ranking the Unaffordability:

The rankings are based on data collected in the third quarter of 2023 from 94 major markets across eight countries: Australia, Canada, China, Ireland, New Zealand, Singapore, the United Kingdom, and the United States. The report utilizes a “median multiple” to measure affordability. This ratio divides the median house price by the median household income.

The markets are then categorized into five affordability brackets based on their median multiple:

1. Affordable (3.0 and under)
2. Moderately Unaffordable (3.1 to 4.0)
3. Seriously Unaffordable (4.1 to 5.0)
4. Severely Unaffordable (5.1 to 8.9)
5. Impossibly Unaffordable (9.0 and over)

According to the report, Hong Kong holds the dubious distinction of being the least affordable housing market in the English-speaking world.

Here’s a breakdown of the top 10 most expensive cities:

1. Hong Kong (16.7)
2. Sydney, Australia (13.3)
3. Vancouver, Canada (12.3)
4. San Jose, California (11.9)
5. Los Angeles, California (10.9)
6. Honolulu, Hawaii (10.5)
7. Melbourne, Australia (9.8)
8. San Francisco, California (9.7) (tie)
9. Adelaide, Australia (9.7) (tie)
10. San Diego, California (9.5) (Bonus) Toronto, Canada (9.3)

Why So Unaffordable?

The report cites several factors contributing to the affordability crisis. The rise of remote work during the pandemic fueled a surge in demand for housing, particularly in suburban and even more remote areas. This demand surge pushed house prices significantly higher as people sought more space, both within the house and in surrounding yards or gardens.

The report also blames “urban containment policies” aimed at limiting sprawl and increasing density in desirable areas. While these policies are intended with good intentions, the report argues that they severely restrict the available land for housing development. In already constrained markets, higher land values translate directly into dramatically higher house prices.