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The purpose of this paper is to analyse the record on housing affordability in Australia over the period 1985 to 2010, conceptually link this with the purported demand and supply drivers given in the literature, and comment on government policy responses. The paper also provides a suggested framework for future research on housing affordability.

The paper employs descriptive analysis of measures of affordability using commercial and other information. In addition, the paper undertakes analysis of the affordability drivers and government responses using recent governmental inquiries and other research into housing affordability.

Housing affordability in Australia has worsened significantly in the past quarter century, including in both urban and regional areas, and is now among the world's most unaffordable. The main contributor at the national level has been the escalation of housing prices because of continuing strong demand arising from strong economic and population growth, the availability of cheaper and more accessible finance, and tax and other incentives for home and investor housing ownership. An additional contributor is unresponsive housing supply resulting from an extensive governmental role in land release and zoning, infrastructure charges, and building and environmental regulation.

As an analytical paper, the central aim is to summarise the findings and conclusions of other work and provide a suggested framework for future research. Accordingly, no attempt made to model directly the relationship between housing affordability, its demand and supply drivers and government policy responses.

There is a need to reassess government policy at all levels as it relates to population, economic, urban, and environmental planning and government regulation and taxation and housing affordability. Need for future empirical work to quantify the causes and consequences of housing affordability.

This study provides a complete account of housing affordability and policy and the literature on housing affordability in Australia over the past 25 years.

This paper aims to investigate the housing preference and housing affordability in Malaysian housing markets. There is a lack of research on the gap between supply and demand of houses in this market. Urbanization has increased the demand of houses in urban areas. However, the high demand in residential units increases the housing price which causes the affordability level dropped. Besides, the residences that provided by developers do not meet the expectation of the home buyers. There are three attributes that examined in this research to understand the home buyers’ preference.

This paper provides quantitative analysis on the housing affordability and the home buyers’ preference. This paper presents the results on the home buyers’ housing affordability and buying preference on houses. In addition, the study further confirmed the significant relationship between monthly income and type of preferred house, as well as monthly income and range of housing affordability using cross-tabulation analysis.

The findings indicated that the housing price in the current market is not affordable by most of the homebuyers and there are certain attributes that important to home buyers which should not be neglected.

This paper helps to shed light on the planning of Malaysian housing policy especially on the issue of providing affordable housing in urban areas.

Policymakers shall consider the elements of economics, social acceptance and feasibility of Malaysian housing policies to achieve sustainability in Malaysian housing markets. With the current government’s move to promote housing affordability amongst B40 income groups, local government and housing developers should work together in addressing housing demand in accordance to states and ensure that there is a more targeted housing policy.

With the detailed analysis on the home buyers’ preference, it helps to promote sustainable housing developments in meeting basic housing needs and preference.

This is the first study to examine relationship between Malaysian housing affordability with monthly income and type of preferred house. In the meantime, the housing affordability is compared with mean housing price and type of perceived affordable house. The paper presented homebuyer’s preference in housing for the consideration of government and housing developers in providing affordable housing.

The purpose of this paper is to compare relative levels of rental affordability across the English housing association sector.

A total of two methods, rent‐to‐income ratio and residual income standards (poverty‐line and budget standard), are used to maximise their strengths and complement their weaknesses in measuring rental affordability.

The rent‐to‐income ratio analysis identified that housing association rents were generally affordable. However, the residual income analyses using two different minimum acceptable standards suggested some scepticism in this regard. In particular, both analyses confirmed the affordability problem in London where nearly half of existing housing association tenants had disposable household incomes that were well below the poverty‐line as well as the largest rent‐to‐income ratio. Both analyses also confirmed that lone parents were more likely than average households to have an affordability problem.

The main limitations of this study are the small sample size of existing housing association tenants and different definitions of incomes, and subsequently different residual income measures for existing and new tenants. However, this study demonstrates that when examining the affordability of housing for the poorest households, multiple overlapping measures of affordability are likely to be more reliable than any single measure.

The paper is an empirical attempt to use a combination of two affordability measures to examine the affordability problem of social tenants in the English housing association sector. It is also unusual in the scientific literature to use different data sources to obtain household incomes for different types of housing association tenants.

The purpose of this paper is to examine the degree of housing affordability in China's 35 large and medium cities. Furthermore, this paper investigates the relationship between housing affordability and the house prices using data from China's 35 large and medium cities from 1996 to 2007.

This paper constructed the housing affordability index and classified cities in terms of their housing affordability degree. OLS, unit root test and cointegration test have also been used in the empirical test section.

The results exhibit that the housing price has played a more important role in housing affordability than household income. Thereby, decreasing housing price is more important than household income to alleviate the housing affordability problem. Meanwhile, housing size has exerted a great impact on housing affordability. Accordingly, developing more affordable houses is an alternative to mitigate the housing affordability issue in China. In addition, it is also found that the housing reform facilitates the housing affordability issue due to the low sale price of the public houses; the population growth rate and geographic locations have no significant impact on the housing affordability.

In terms of the research limitations, the heterogeneity factor may be introduced considering the regional heterogeneity of cities in China. Therefore, researchers are encouraged to test the propositions with enriched datasets.

Practical implications are that decision‐makers in government should pay close attention to the risk of the housing bubble. That is, the soaring house price was driven by investment instead of by the demand side.

This paper contributes to defining the dynamic upper boundary of the percentage of housing expenditure to income ratio via Engel's coefficient using the housing market data of 35 large and medium cities in China from 1996 to 2007.

The downturn in the residential housing market in Northern Ireland (NI) has been the most pronounced of any UK region, with house prices contracting circa 40 per cent between 2007Q3 and 2009Q4. The downturn at first glance appears to have increased the “ability to afford” however this is nonetheless a “false dawn”. Significant deposit levels coupled with a more prudent lending culture has ensured that housing affordability remains a primary policy concern. The purpose of this paper is to empirically analyse the interrelationships between mortgage liquidity and housing affordability in NI during the boom‐bust cycle in the residential property market.

The paper analyses mortgage‐lending statistics for NI in the period 1993‐2009, using time series panel data. House price data are drawn from the University of Ulster House Price Index over the same time series. To facilitate analytical interpretation and outcome analysis, quantitative evaluation is applied within a first‐time buyer (FTB) affordability framework.

This study finds that the relationship between mortgage finance and affordability has been driven by deregulation of the mortgage market contributing to the rise in house prices and affordability pressures during the market up cycle. More recently, ongoing liquidity constraints within the financial sector are impairing recovery in the residential property market culminating in heightened concerns of both purchase and “deposit gap” affordability. The key findings suggest that the new significant capital requirement needed to access the housing market will inevitably prolong affordability pressures for the foreseeable future.

This paper contributes to affordability debate in two ways. First, it examines the effect of both liberalised and contracted patterns of mortgage finance on affordability and argues that conventional approaches appear to present a “false dawn” for FTBs in NI. Second, the paper demonstrates that affordability post‐financial crisis has shifted in genre towards a purchase and deposit gap (lag time) issue.

Shared equity homeownership is a form of subsidised, resale-restricted housing through which lower-income households can sustain their affordability. This paper aims to distinguish two types of affordability within shared equity homeownership: “entry affordability” indicates how affordable subsidised housing is when a household first becomes a subsidised owner; while “exit affordability” means how affordable private housing is after a household has enjoyed subsidised homeownership for a period of time.

Using price-to-income ratios, this study compares the entry and exit affordability of shared equity homeownership programs in Australia, Mainland China, Hong Kong, Norway, the UK and the USA. Based on these international comparisons, this study generalises two distinct types of shared equity homeownership models, namely, the models of “share-to-buy” and “share forever”. A new model, “follow-as-you-go”, is further suggested to increase the elasticity of potential affordable housing supply by providing incentives for existing subsidised homeowners to move.

A key finding of this study is that while shared equity homeownership programs can improve entry affordability, homeowners’ exit affordability is weak when subsidised homeowners have to share their capital gain with the government. While many housing policy discussions around the world that support shared equity homeownership focus only on the improvement of entry affordability, these discussions usually ignore the importance of exit affordability. This study attempts to fill the void in the understanding of these two types of affordability.

Shared equity homeownership policy is not only about offering low-income households but also an affordable housing option. It is also about facilitating well-off subsidised homeowners to move up the housing ladder so that the affordable housing option can be freed up for others in need. In a word, it is not only entry affordability but also exit affordability that matters.

The purpose of this paper is to examine the relationship between house price affordability (HPA) and rental price affordability (RPA) in New Zealand. The cointegration of HPA and RPA is of particular focus given rising house prices and rising rents.

The study examines the lead-lad correlation between HPA and RPA. The method uses a generalised least square technique and the development of an ordinary least squares model.

The study shows that there is an existence of cointegration and unidirectional statistical causality effects between HPA and RPA across 11 regions in New Zealand. Furthermore, Auckland, Wellington and Canterbury are the three regions in which the results detect the most extreme effects amongst HPA and RPA compared to other places in the country. Extended empirical work shows interesting results that there are lead-lag effects of HPA and RPA on each other and on mortgage rates at the national scale. These effects are consistent for both methods but are changed at individual lead-lag variables and amongst different regions.

The study empirically provides useful insight for both academia and practitioners. Particularly in examining the long-run effects, cointegration and forecasting of the volatile interactions between HPA and RPA.

Relative to comparable industrialized countries, Germany stands out in terms of its low homeownership rate (43 percent). For Germany, it is unknown so far to what extent the low rate of homeownership can be related to housing being unaffordable. One reason for the lack of evidence is the apparent lack of data. The purpose of this paper is to fill this gap.

Based on a regional dataset of 3.9 million asking prices of housing units collected by a real estate listing engine, the paper applies internationally established affordability concepts to the German housing market. The authors then run a number of cross‐section regressions at the level of the 16 German federal states, using the affordability measures as explanatory variables of the rate of homeownership.

The results show that the average German household would have to sacrifice a large part of its non‐housing consumption to afford homeownership, especially of single‐family homes. As the regional analysis reveals, certain types of household can even be considered excluded from the ownership market in some particularly unaffordable states with cost burdens of over 50 percent, such as Bavaria. The cross‐section regression results for the 16 federal states affirm the importance of affordability as a determinant of the homeownership rate.

The official data on ownership rates are rather spotty over time and only available for a single year (2006) for the time frame that is considered for the affordability analysis (2005‐2010). Given the data limitations, the regression analysis has to be confined to a single cross section least squares regression for 2006. The authors are aware that to obtain truly convincing results, it would be necessary to capture the development of ownership rates in different localities in Germany, such as the 16 federal states, over time and to check to what extent the affordability measures can explain any of the variation in ownership rates in a panel data framework with fixed effects for federal states and time. However, the authors feel that the regression results may serve as a starting point; they are better than a set of simple correlations, even if they constitute not a conclusive causal analysis.

Any public policy initiative to raise Germany's homeownership rate will have to address the question of how to make housing more affordable. The recent elimination of homeowner subsidies is working in exactly the opposite direction.

The affordability approach used is technically not new or challenging, but it offers a basis for comparison that has been conspicuously lacking so far for the fourth largest economy of the world. By applying affordability concepts that are well accepted and in use internationally, the authors believe that they can provide at least some suggestive evidence that can further spur research into the affordability issue. While the authors do not break new methodological ground with their paper, they do provide a basis of comparison for policy discussion and for further research. Germany provides a unique environment for affordability research, due to its reunification history, observations from which may thus yield insights valuable to the international research community.

The purpose of this paper is to address both the measurement of affordability and variations in affordability between local housing market areas (HMAs).

The practical data issues that arise from measuring local affordability are reviewed by reference to studies in the UK. The paper argues that local measures should relate to a functional geography of HMAs rather than simply local authority boundaries. This approach is shown to be more theoretically sound but faces data constraints. An empirical case study of the North West of England then follows as a demonstration based on a tiered geography of HMAs. It addresses the constraints on local income data by measuring affordability by reference to a particular household type and associated income.

Local UK affordability indicators are shown to be primarily about access to home ownership rather than a wider view of local house price structures on affordability. The paper also draws out the importance of affordability measures linked to functional market areas. The results of the analysis presented highlight that there are local differences in house price structures and hence associated differential affordability of house types between local HMAs.

This is the first study that examines affordability at the local level based on functional areas rather than local authority administrative boundaries. This approach gives a truer picture of the variability in local affordability. The applied analysis tackles the data constraints of functional areas and has the potential to be adapted and extended.

This study aims to identify the determinants of housing affordability in an effort to inform policy.

The authors use econometric analysis to determine variables that impact housing affordability in the USA.

The authors find that affordability depends on a number of demographic factors as well as physical characteristics of properties, including average age of homeowner, family size and average dwelling square footage. The authors also find that vacancy rates, increase in house price and median family income also have a significant impact on housing affordability. Additionally, the authors find that households with high-cost burdens are more vulnerable to mortgage rates and property taxes than those with moderate-cost burdens. As a result, changes in economic or policy variables tend to have a disproportionate impact on high-cost-burdened households, and they are more vulnerable to economic and policy shocks.

To date, the literature has not done a systematic investigation of housing affordability using detailed census data.