Affordable housing has always been a topic of widespread concern among people. According to the latest research from the Chapman University Center for Demographics and Policy, the real estate markets in 10 cities globally are facing severe challenges, with people struggling to afford housing prices. Among them, the United States and Canada occupy six spots, with four cities in California alone making the list. However, the most unaffordable city in the world for buying a house is Hong Kong.
For over twenty years, the “Demographia International Housing Affordability Report” from Chapman University’s Center for Demographics and Policy has been the gold standard for monitoring housing costs. This year’s research was conducted in collaboration with the Frontier Centre for Public Policy in Canada.
The 2025 edition of the “Demographia International Housing Affordability Report” provides affordability ratings for 95 major markets (metropolitan areas) in eight countries for the third quarter of 2024. When evaluating housing affordability, Demographia uses the median multiple, which is the median house price divided by the median household income.
This year, a new category of “impossibly unaffordable” has been added, denoting an extreme situation where a middle-income household in a city finds it impossible to afford housing when the median house price multiple is 9.0 or higher, meaning the price is over 9 times the median income. Such unaffordability levels didn’t exist over thirty years ago. Additionally, obtaining a mortgage for a house with this median multiple is nearly impossible for middle-income families.
The research shows that in California’s four major metropolitan areas – San Jose, Los Angeles, San Francisco, and San Diego – buying a house is “simply unaffordable.” Honolulu also ranks among the top ten least affordable housing markets with a median house price that is 10 times the median income.
The study found that out of the analyzed markets, 12 housing markets were classified as “unaffordable,” with not a single metropolitan area considered “affordable.” An “affordable” market is where the median house price does not exceed three times the median annual income for that area.
The most unaffordable real estate market is Hong Kong, where the median house price is over 14 times the median local worker’s income. Australia also faces similar affordability challenges, with cities like Sydney, Adelaide, and Melbourne making it into the top ten.
Below are the top ten least affordable housing markets and their house price to income ratios:
Hong Kong: 14.4
Sydney: 13.8
San Jose, California: 12.1
Vancouver, Canada: 11.8
Los Angeles: 11.2
Adelaide, Australia: 10.9
Honolulu: 10.8
San Francisco: 10.0
Melbourne, Australia: 9.7
San Diego, California: 9.5
“These high housing prices largely result from policies that aim to restrict growth in peripheral areas, which has been a common practice in urban development,” noted Joel Kotkin, director of the Chapman University Center for Demographics and Policy in the research.
For example, in California, the state is striving to preserve more natural land while promoting the development of high-density housing such as apartment buildings, small homes, and accessory dwelling units like backyard cottages.
However, Wendell Cox, the author of the Chapman report, stated that increasing housing density may not necessarily solve the affordable housing crisis. This is because new housing units are often small and expensive, rarely meeting the needs or preferences of many middle-income homebuyers.
David Leis, chairman of the Frontier Centre for Public Policy, highlighted in the report that the deterioration of affordable housing is “a major driver of the current cost-of-living crisis affecting the middle class and working population.”