Australia’s ‘Impossible’ Housing Market: Sydney and Adelaide Lead Global Unaffordability

The latest Demographia International Housing Affordability Report (2025) ranks Sydney as the second least affordable housing market in the world, behind only Hong Kong — reaffirming the city’s position as one of the hardest places on the planet to buy a home.

Sydney’s median house price is now 13.8 times the median household income, a level Demographia calls “impossibly unaffordable.” But the bigger surprise comes from Adelaide, where affordability has deteriorated sharply. Once known as Australia’s “affordable capital,” Adelaide now ranks second least affordable in the country, with a price-to-income ratio of 10.9, surpassing Melbourne (9.7) and Brisbane (9.3).

Across all major cities, Australia’s national multiple sits at 9.7 — worse than Canada (5.4), the UK (5.6), or the US (4.8) — making Australia one of the least affordable housing markets in the developed world.

Persistent price growth, restrictive planning, and surging construction costs continue to limit new housing supply. With prices up 8.9% over the past year and expected to climb further, affordability pressures are unlikely to ease soon.

Insight

Australia’s housing market faces a perfect storm of high demand, limited new supply, and slower construction. Labour shortages, material costs, and long approval times are constraining delivery, keeping new home completions well below target. As a result, affordability is unlikely to improve soon — making off-plan and early-stage property investments one of the few ways to secure value before the next supply squeeze.

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