Not one of the 95 major housing markets tracked by the most comprehensive global affordability study now qualifies as “affordable.” Not a single one. That milestone — reached for the first time in the two-decade history of the Demographia International Housing Affordability Report — captures something that millions of city dwellers already feel in their bones: for the first time in modern history, homeownership has become structurally out of reach in virtually every major city on earth.
The numbers tell a story of a slow-motion crisis that accelerated with astonishing speed. In 1985, the median U.S. home cost about 3.1 times the median annual household income. By 2025, that ratio had climbed to 5.1 — near record highs. The median age of a first-time American homebuyer has risen from 29 in the 1980s to 40 today. In the same period, the proportion of millennials who own homes has fallen sharply, even as their parents’ generation sit on housing wealth that continues to compound. The K-shaped economy has produced a K-shaped housing market: those who got in early accumulate equity; those who didn’t are locked out entirely.
But the United States, for all its dysfunction, is nowhere near the worst of it.
The “Impossibly Unaffordable” Cities
The Demographia report introduced a new category last year to describe markets so extreme that traditional benchmarks no longer capture the reality. It is called “Impossibly Unaffordable.” It did not need to exist until recently.
Hong Kong leads the global ranking — as it has for fourteen consecutive years — with a median multiple of 14.4. That means the typical home costs more than fourteen times what the typical household earns in an entire year. In 2019, at peak, that ratio reached 23.2. Even with a significant correction driven by capital outflows and emigration following political changes, Hong Kong remains in a category of housing inaccessibility all its own. The government’s proposed Northern Metropolis project — which could eventually add over 900,000 new housing units near the Shenzhen border — has been mooted as a structural fix, but implementation remains years away.
Sydney sits in second place globally with a median multiple of 13.8, and according to analysts, it is likely to surpass Hong Kong within twelve months as the world’s single most unaffordable housing market. In 1987, Australia’s median house price was 2.8 times median income. That ratio has more than trebled. Australia now has five cities ranked in the top fourteen most expensive housing markets on earth — Hong Kong is the only non-Australian entry at the very top. Adelaide, a city not typically associated with global housing extremes, ranks as the sixth most expensive market in the world, more unaffordable than London, New York, or Chicago by price-to-income measure.
The affordability gap between incomes and median dwelling values in Australia sits at approximately $300,000 — the difference between what average earners can finance and what properties actually cost. First-home buyers who rely on income alone cannot bridge it without significant inherited wealth or a prolonged period of saving that the market itself continues to outrun.
North America: A Continent Split
Vancouver ranks fourth globally with a median multiple of 11.8, placed firmly in the “Impossibly Unaffordable” bracket. San Jose comes third at 12.1, followed by Los Angeles at 11.2 and Honolulu just behind. Canada as a whole now carries a national median multiple of 5.4 — classified as “severely unaffordable” — and all six of its major housing markets fail to meet even basic affordability thresholds.
In Toronto, the situation combines high purchase prices with a near-complete absence of rental relief. The rental vacancy rate hovers around 0.5%, one of the lowest in Canada. In high-cost areas of the city, the average household allocates about 66% of its income to homeownership costs — more than double the commonly accepted 28% threshold for housing stress. Development approval times in the Greater Toronto Area average twenty months, with municipal fees and delays adding between $43,000 and $90,000 to the cost of each new home before a single unit is built.
Across the border, the U.S. picture is more fragmented. Nationally, 65% of American households cannot afford a newly built home at median prices and current mortgage rates. In New Hampshire, 83% of households are priced out. Eleven states have at least 80% of their households locked out of new home purchases. Yet a divergence is emerging: Sun Belt cities that surged in the pandemic boom — Austin, Miami, Phoenix, Tampa — are now suffering price corrections as inventory floods the market, with analysts projecting average U.S. home prices to turn negative by year-end. Meanwhile, Rust Belt cities that were left behind during the boom are now seeing renewed demand from buyers priced out of premium markets.
The correction in former boom cities is not the same as affordability returning. It is the market sorting itself for a smaller pool of buyers who can still qualify.
Europe and Asia: Different Crises, Shared Roots
In London, households spent a median 27.4% of income on housing costs in the most recent survey data — a figure that understates the pressure on renters and first-time buyers in outer boroughs, where rents have consumed a far higher share of take-home pay. London’s deputy mayor for housing vowed earlier this year that 2026 would mark a turning point, pointing to emergency measures including reduced affordability quotas for developers and expanded mayoral powers to override rejected planning applications. The structural problem — that private sector housebuilding has stagnated while demand from a growing city continues — remains unsolved. More than 130,000 London households, including nearly 170,000 children, are currently living in temporary accommodation.
The Netherlands faces a shortage of approximately 396,000 homes as of mid-2025. Despite government targets calling for 100,000 new homes per year, only around 82,000 were built in 2024. If current trends continue, the shortfall is projected to reach 453,000 homes by 2027. In Amsterdam, Utrecht, and Rotterdam, tight planning regulations compound the structural deficit.
Asia tells a tale of two crises that rarely appear in the same sentence. Hong Kong and Singapore dominate the price-to-income rankings and attract most of the media attention. But it is residents of Manila, Colombo, and Yangon who report the highest rates of actual housing stress. A Gallup survey of more than 140 countries found that 55% of Filipinos said they had struggled to pay for shelter in the past twelve months — the highest share in the world. Sri Lanka followed at 54%, Myanmar at 49%, and Thailand at 40%. These are not markets where homes are expensive relative to income; they are markets where incomes are too low to afford any formal housing at all.
The Structural Cause That Governments Don’t Want to Name
Across every continent and every price point, the same structural driver appears in the data: supply constraints created or sustained by policy choice.
Restrictive zoning, urban containment policies, exclusionary planning regulations, and the political power of existing homeowners to block new development have together throttled housing supply in virtually every desirable city. A McKinsey analysis identified land — not materials or labour — as the majority of housing costs in most major cities. The implication is stark: building more homes in the wrong locations does not solve the problem. Only building where people need to live, at densities that markets can absorb, at permitting speeds that developers can plan around, produces affordability.
Japan stands as the most notable counterexample. Because zoning is controlled at the national level rather than by local governments — removing the ability of neighbourhood interests to block construction — Tokyo has remained significantly more affordable than cities of comparable global importance. It is not geography or climate or income levels that explain Tokyo’s relative affordability. It is the decision to let housing be built.
The Political Moment
Housing affordability is no longer an economic story with political implications. It is a political crisis with economic causes.
In New York City, Zohran Mamdani’s rise from relative obscurity to win the mayoral race in 2025 was built almost entirely on a cost-of-living platform centred on housing. In Australia, Canada, and the UK, housing has become the dominant issue for voters under 45. In Toronto, Mayor Olivia Chow’s 2026 budget introduced new taxes on home speculators and the top two per cent of luxury homebuyers to fund affordability measures — a signal of where political pressure is now pointing. In London, the threat of housing becoming the central issue in the 2028 Mayoral election is forcing more aggressive interventions than the city has seen in decades.
The global affordability crisis is, at its foundation, a problem of political economy: the people who own homes have historically had more political power than the people who need them. That balance is shifting — slowly, unevenly, and probably too late for a generation already priced out of the markets where their opportunities lie.
What to Watch
The next twelve months will be defined by three converging forces: whether interest rate reductions in Australia, Canada, and the UK are large enough to unlock first-time buyer demand without reigniting price growth; whether Sun Belt corrections in the United States stabilize or continue into a deeper housing deflation; and whether any government, anywhere, produces a supply-side intervention substantial enough to move the needle on the price-to-income ratios that have defined this decade.
The Demographia report’s most striking finding is not a number. It is a trend line: every market it has tracked for twenty years has moved in the same direction. Without a fundamental change in the policies that restrict where and how homes are built, there is no mathematical path to affordability for the next generation of buyers in the world’s most consequential cities.
They are not waiting. They are leaving.
Sources: Demographia International Housing Affordability Report (2025 Edition), Gallup World Poll 2025, World Economic Forum (June & September 2025), American Enterprise Institute Housing Center (April 2026), Canada Mortgage and Housing Corporation, Greater London Authority Housing in London Report 2025, Fortune/AEI Housing Price Analysis (April 2026), DevelopmentAid Global Housing Crisis Report.
