Another international comparison of housing costs...

The ‘Demographia International Housing Affordability Survey 2016’ is getting some coverage due to Limerick being crowned the most affordable city across all countries surveyed. Leaving aside the dubious charms of Limerick, the survey looks reasonably interesting. Apart from the fact that it shows how relatively affordable Ireland (even Dublin) is in comparison with Australia, the UK and Asia, it is also interesting in that it views rising house prices as a deep social and economic problem. It also puts the blame firmly on planners:

*"Why have ‘house prices’ skyrocketed? While influential bodies in Australia like the Productivity Commission and the Reserve Bank focused their attention on demand drivers like capital gains tax treatment, negative gearing, interest rates, readily accessible finance, first home buyers’ grants and high immigration rates, few were looking at the real source of the affordability problem - land supply for new housing stock.

It is undeniable that demand factors played a role in stimulating the housing market and those factors were, for the most part, in the hands of national governments. However, the real culprit, the real source of the problem, was the refusal of local and state governments and their land management agencies to provide an adequate and affordable supply of land for new housing stock to meet demand.

………

It is important to remember that the “scarcity” that drove up land prices is wholly contrived - it is a matter of political choice, not geographic reality. It is the product of restrictions imposed through planning regulation and zoning."

demographia.com/dhi.pdf*

While this is true, certainly in comparison with most of the US, it only holds if one is willing to build vast, car-dependant suburbs. Land supply in cities is finite (although much could be done to facilitate development in cities, and to prevent landowners and developers making huge windfall gains on land/sites). The author also ignores the fact that a greater proportion of people’s income inevitably goes towards housing cost as other items - food, technology etc - have become much cheaper.

And Waterford is the runner up :slight_smile:

Hong Kong @ 19 times income is at the other end of the spectrum.

Demographia 2017 demographia.com/dhi.pdf

Its an interesting report, not without its flaws but in general accurate. The scale of houses prices in major cities is off the wall. The market can stay irrational for many years but will eventually regress to the mean

Very true.

Ireland does not have a problem with housing affordability. Dublin does.

The rest of Ireland has an issue with jobs

No more than it ever had.

200k jobs have been added since 2012. Spread reasonably evenly across the country.