The cost of property in Dublin has reached "seriously unaffordable" levels and the situation is only getting worse, according to this year's International Housing Affordability Survey.
The Demographia study analysed the third quarter of 2016 and placed Dublin's 'median multiple' – the median house price divided by the median household income – at 4.7, up from 3.3 in 2011. Looking ahead, it predicted that "Dublin could be headed towards the severe unaffordability reached during the housing bust in 2008".
To place this measurement in historical context, Ireland had a price-to-income multiple of less than 3.0 in the early 1990s. The current median house price was placed at €276,000, with median household income of €58,400.
It quoted UCD economist Colm McCarthy's warning that the cost of housing has risen far too rapidly in the Dublin area and his suggestions that a new housing "bubble" could be developing despite the market cooling policies of the Central Bank.
While it noted that Dublin was Ireland's "only major metropolitan area market", it ranked Galway (3.4) and Cork (3.5) as "moderately unaffordable". Waterford (2.6) and Limerick (2.3) were described as affordable.
Overall, the study analysed 406 housing markets in nine countries – Australia, Canada, Hong Kong, Ireland, Japan, New Zealand, Singapore, the UK and the US.
Comparatively, Dublin did not fare too badly. The 11 most affordable major markets (3.0 and under) were all in the US (median market of 3.9), with Japan following (4.1). Ireland was just below the United Kingdom (4.5) and tied with Canada when it came to median affordability. Dublin is still more affordable, according to the survey, than Stoke-on-Trent, Birmingham, Leicester, Swansea and Cardiff.
The report stated:
"The 'best cities' for housing affordability are often better on middle-income outcomes that the high-end best cities that attract media attention.
"This is illustrated by a comparison between Dallas-Fort Worth, where housing affordability is far better than in Toronto, which was rated as the 'best city' by The Economist.
"In addition to better housing affordability, traffic congestion is better. This is despite the fact that Toronto employs the most favoured urban strategies, which Dallas-Fort Worth does not. This is not to dispute Toronto’s luxury rating, but it is of little use to the much larger number of middle-income households being priced out of home ownership."
At the other end of the scale, Hong Kong is the most expensive city in the world. Though its median multiple was down from 19, the worst ranking on record, to 18.1, it was the least affordable housing market for the seventh year in a row.
It was trailed in expense by Sydney (12.2), Vancouver (11.8, with house prices rising the equivalent of a full year's household income in a mere year).
Oliver Hartwell, executive director of the New Zealand Initiative, said of the data:
"The ‘median multiple’ is not a perfect measure because it does not account for house sizes or build quality. But it is the only index that allows a quick comparison of different housing markets, and it is the best approximation of housing affordability measures we have to date."