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From the perspective of housing affordability, Portugal is an interesting case study, considering that Portugal ranks 5th in terms of price-to-income ratio and has experienced, since 2015, a significant increase in real estate prices.

The provision of housing is a critical social development factor. With the growing worldwide urbanization and the demand pressure over real estate in many cities, the problem of affordability has gained increase attention by policy makers. Housing affordability is hardly a new topic from a literature perspective, but the recent post-pandemic worldwide inflation growth has re-centered affordability as key topic in the housing agenda. This paper provides a comprehensive overview on past literature and a detailed analysis on the Portuguese market at the municipal level, by analyzing the changes in housing affordability in recent years.

Despite this growth, overall, affordability has improved. The study also shows the importance of municipal-level analysis, given the significant geographical differences. The authors' study confirms that many municipalities, outside metropolitan areas, exhibit low levels of affordability. Nevertheless, markets with higher average real estate values tend to exhibit even lower affordability, outpacing the higher levels of income.

Previous studies have focused on affordability issues on a national or highly aggregated level or focusing only on the two largest metropolitan areas in the country. This paper provides a deeper understanding on the inequalities of housing affordability between Portuguese municipalities.

This paper, a case study, aims to consider whether the income ratio and rental ratio tracks the formation of residential housing price spikes and their collapse. The ratios are measuring the risk associated with house price stability. They may signal whether a real estate investor should consider purchasing real property, continue holding it or consider selling it. The Federal Reserve Bank of Dallas (Dallas Fed) calculates and publishes income ratios for Organization for Economic Cooperation and Development countries to measure “irrational exuberance,” which is a measure of housing price risk for a given country's housing market. The USA is a member of the organization. The income ratio idea is being repurposed to act as a buy/sell signal for real estate investors.

The income ratio calculated by the Dallas Fed and this case study's ratio were date-stamped and graphed to determine whether the 2006–2008 housing “bubble and burst” could be visually detected. An ordinary least squares regression with the data transformed into logs and a regression with structural data breaks for the years 1990 through 2019 were modeled using the independent variables income ratio, rent ratio and the University of Michigan Consumer Sentiment Index. The descriptive statistics show a gradual increase in the ratios prior to exposure to an unexpected, exogenous financial shock, which took several months to grow and collapse. The regression analysis with breaks indicates that the income ratio can predict changes in housing prices using a lead of 2 months.

The gradual increases in the ratios with predetermine limits set by the real estate investor may trigger a sell decision when a specified rate is reached for the ratios even when housing prices are still rising. The independent variables were significant, but the rent ratio had the correct sign only with the regression with time breaks model was used. The housing spike using the Dallas Fed's income ratio and this study's income ratio indicated that the housing boom and collapse occurred rapidly. The boom does not appear to be a continuous housing price increase followed by a sudden price drop when ratio analysis is used. The income ratio is significant through time, but the rental ratio and Consumer Sentiment Index are insignificant for multiple-time breaks.

Investors should consider the relative prices of residential housing in a neighborhood when purchasing a property coupled with income and rental ratio trends that are taking place in the local market. High relative income ratios may signal that when an unexpected adverse event occurs the housing market may enter a state of crisis. The relative housing prices to income ratio indicates there is rising housing price stability risk. Aggregate data for the country are used, whereas real estate prices are also significantly impacted by local conditions.

Ratio trends might enable real estate investors and homeowners to determine when to sell real estate investments prior to a price collapse and preserve wealth, which would otherwise result in the loss of equity. Higher exuberance ratios should result in an increase in the discount rate, which results in lower valuations as measured by the formula net operating income dividend by the discount rate. It can also signal when to start reinvesting in real estate, because real estate prices are rising, and the ratios are relative low compared to income.

The graphical descriptive depictions seem to suggest that government intervention into the housing market while a spike is forming may not be possible due to the speed with which a spike forms and collapses. Expected income declines would cause the income ratios to change and signal that housing prices will start declining. Both the income and rental ratios in the US housing market have continued to increase since 2008.

A consumer sentiment variable was added to the analysis. Prior researchers have suggested adding a consumer sentiment explanatory variable to the model. The results generated for this variable were counterintuitive. The Federal Housing Finance Agency (FHFA) price index results signaled a change during a different year than when the S&P/Case–Shiller Home Price Index is used. Many prior studies used the FHFA price index. They emphasized regulatory issues associated with changing exuberance ratio levels. This case study applies these ideas to measure relative increases in risk, which should impact the discount rate used to estimate the intrinsic value of a residential property.

This paper aims to offer an extensive empirical case study analysis by investigating housing affordability in Turkey as a whole, and in Istanbul, Ankara and Izmir over the period of 2006 and 2017 and its sub-periods.

This paper develops a theoretically informed model to assess affordability using complementary methodologies in quantitative analysis. This study seeks to help outline the nature of the problem in aggregate level and in the cities; it also seeks to offer lessons about how to address measurement and modelling challenges in emergent market contexts by constructing aggregate-/city-level housing cost-to-income (HCI) ratio, adjusted HCI (AHCI) ratio, housing affordability index (HAI) and effective HAI sensitive to multiple calculation methodologies and alternative data set involving income distribution and poverty tranches.

HCI, AHCI, HAI and EHAI models generally suggest the parallel results: housing is not affordable in Turkey and in Istanbul, Ankara and Izmir except for the highest income groups. The evidence implies that besides macroeconomic instabilities, distorted interest rates and short average mortgage maturity, poverty and unequal income/wealth distributions are the main reasons of the Turkish housing affordability crisis specifically heightened in metropolitan areas such as in Istanbul.

The evidence provides an insight on housing affordability problems in Turkey. However, small sample size and short observation period create a limit for generalisation of the findings. Further analysis would be required to illustrate how housing affordability changes in different cities of Turkey in a longer period.

By using empirical approaches, this paper helps to understand how serious housing affordability problems of Turkey in aggregate and urban levels. This evidence helps to explain declining ownership ratio in low-income groups and in urban areas. Reliable explanations on existing housing crisis of Turkey also help to develop affordable housing policies.

Declining housing affordability and homeownership ratio may translate as the rising housing inequality and insecurity among Turkish households. Moreover, better affordability values of higher income groups suggest that existing inequality, economic/social segmentation, and hence social tension between high and low income groups, may further increase. In this respect, the authors suggest socially important policies such as reducing income/wealth inequalities and increasing affordable housing supply.

This study offers a detailed empirical case study analysis that can be used as an exemplar of how to overcome data constraints in other evolving housing market contexts. This study sets out an approach overcoming the challenges of measurement. This study also combines existing methodological approaches with the modified variables to provide a more realistic aggregate-/urban-level housing affordability picture. The authors calculated some parts of housing affordability ratio and index series using discretionary income, minimum wage and effective minimum wage to show the variations of different measurement approaches. Some constructed series are also sensitive to income distribution and poverty thresholds. Collectively, this empirical approach, developed by using emerging market data, provides a contribution to the literature.

This paper investigates the housing affordability crisis from the perspective of vulnerable social groups (VSG) in Turkey and Turkey's megacities, Istanbul, Ankara, and Izmir, over the period of 2010 and 2019.

The author employ house cost and multiple income variables, involving residual income, to construct socially informative house cost-to-income (HCI) ratios. To measure the country/urban level socio-economic dimensions of the affordability crisis, the author develop 12 main and 76 specific housing affordability criteria.

The author find that housing is not affordable in Turkey and low/unequal distribution of income is a contributive factor for the affordability crisis of VSG. The evidence suggests that housing unaffordability for VSG is deeply rooted in the socio-economic/demographic disparities that eventually result in income and homeownership inequalities.

Constructed HCI ratios provide precise information for the targeted housing affordability policies for the VSG defined by education level, age, location, income distribution, employment status/condition and gender. The author' socially targeted modeling approach briefly suggests that housing affordability policies should focus on low-educated groups, young generations, some elementary occupations, employees in low-income industries, and casual/regular-small firms' employees.

This is the first study that provides nuanced information on housing affordability for Turkey by employing HCI ratios for the targeted VSG. This socially targeted empirical analysis is the first analysis for developing housing markets as well. From the methodological perspective, the author contribute information quality of the housing affordability ratio by using income data of various aggregate-level socio-economic/demographic groups.

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 main purpose of this paper is to explore the transitional dynamics of housing affordability indicators of major cities in three developed countries: the USA, Canada and Australia, in the period after the global financial crisis. As the global housing markets are more interconnected today, it is essential to investigate the demographic movement pattern and their impacts on housing market dynamics.

Based on the Markov transition matrix approach and the stochastic kernel technique, a newly established framework named the mobility probability plot (MPP) is adopted to investigate the city-level trends of housing affordability in the three countries during the period 2008-2015.

The results suggest that the transitional dynamics of the USA’s housing affordability trend saliently differs from those of Canada and Australia: in the USA, MPP results reveal that when the price-to-income (P/I) ratio is higher than 3.5 times, it has a high tendency of moving downward in the next period. In Australia, housing affordability tends to continue deteriorating when the P/I ratios are in the range from 8.0 to 8.6. In Canada, the MPP analysis indicates that the P/I ratios tend to increase further when the ratios are between 5.7 and 7.0, and within the range of 8.3-9.5.

This paper adopts an innovative approach to explore the city-level trends of housing affordability in the three developed countries during the period 2008-2015. The distribution dynamics approach has several virtues: first, this approach does not merely focus on the issue of housing affordability but also includes an analysis of the underlying housing affordability distribution. Second, it can clearly show the mobility of the city-level units in terms of the P/I change. Third, it can predict the proportion of the entities in different P/I ratio bands in a number of years ahead and even in the long run.

Affordable homeownership is a policy that is often accorded a great deal of policy attention by governments of many countries. This paper aims to examine the market implications of setting a housing price to income ratio target for a market segment by the government.

The policy requires active intervention by the government with regard to the targeted sector. The paper uses a simple model of the housing market with a homeownership affordability target to derive the market implications of such targets.

In the presence of uncertainty and resource constraints, the objective of homeownership affordability is achieved for the targeted group at the expense of greater volatility in residential construction activity. When the size of the targeted sector is significant in size, there are spillover price and crowding out effects on the non‐targeted housing market segment.

This results in political pressure on the government to expand homeownership affordability targets to increasing segments of the population. Housing price to income ratios tend to be fairly constant over time and across targeted groups, the housing supply is relatively price inelastic and the income elasticity of housing demand is less than one.

The Singapore government intervenes extensively in the housing sector to ensure homeownership affordability, with a resulting homeownership rate of 91 percent for the resident population. The above hypotheses regarding the implications of setting housing price to income ratio targets are tested using the Singapore housing market.

This paper adds to the literature by analyzing the market implications of setting homeownership affordability targets in the context of a targeted housing segment.

The purpose of this study is to analyze short- and long-run market-sensitive drivers of housing affordability. The study highlights an ongoing housing affordability crisis in an emerging market context by also providing an empirical tool to combat the crisis.

To investigate determinants of uniquely constructed effective housing affordability index and house price to income ratio index, the author uses a bound testing approach to cointegration and error correction models, besides causality tests, variance decompositions and impulse response functions. This study uses Turkish data for the period of 2007 M06 and 2017 M12.

The evidence suggests that the housing affordability crisis is mainly driven by credit expansion, rent and construction costs. A sensible housing policy response would target these variables. This evidence suggests that housing affordability mostly depends on housing market dynamics rather than policies because of the exogeneous/cyclical natures of the drivers.

Data constraints shape the study. A regional or an aggregate-level panel study cannot be developed because of a lack of data. This limitation inevitably results in the exclusion of relevant socio-economic/political factors and is also the main reason for the lack of comparative analysis in a cross-country setting.

This study argues that dependency on neoliberal housing market practices seems the underlying reason for the lack of efficient policy answers and the ongoing affordability crisis. From a policymaking perspective, the study suggests that necessary policy measures to resolve the housing affordability crisis may give a specific emphasis on housing rent, housing credit volume and construction costs as the major components of the crisis.

This study develops a novel measure and presents a new conceptual framework by combining quantitative research methods and policymaking in housing affordability. In this respect, to the best of the author’s knowledge, this is the first work to comparatively investigate the determinants of uniquely developed monthly housing affordability measurements.

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.

The purpose of this paper is to measure the long-run housing affordability of Malaysia over time for households at various income levels and to demonstrate how short- and long-run affordability measures can reach contradicting conclusions.

In this study, a long-run housing affordability index (HAI) for Malaysia was constructed for the sample period 1995 to 2014, using data from house prices and household incomes. The HAI was also modified to compute a mortgage affordability index (MAI) to account for intergenerational transfers.

The results show that households at the 25th income percentile cannot afford any of the four dwelling types in Malaysia. For households at the 40th income percentile and the median income levels, high-rise and terrace housing are affordable. However, significant downward trends in HAI and MAI are documented beginning 2009, which indicates increasing housing stress for households at or below the median income. The short-run affordability measure represented by the median multiple (MM) indicator showed bleaker conclusion for housing affordability, with all dwelling types considered unaffordable over the entire sample period

On the basis of the empirical results, this paper provided several long-term proposals to ameliorate the housing affordability problem in Malaysia.

With the MM ratio being the official affordability measure reported for Malaysia, this study introduces the nation’s first long-run housing affordability measure. It is hoped that this long-run measure will achieve widespread adoption in Malaysia. Given the deteriorating long-term affordability, this study offers several possible long-term solutions.