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If you think US real estate is expensive, look at other county's income to property ratios. https://www.numbeo.com/property-investment/rankings_by_country.jsp h

If you think US real estate is expensive, look at other county's income to property ratios. https://www.numbeo.com/property-investment/rankings_by_country.jsp https://www.numbeo.com/property-investment/rankings_by_count... In the US it's 4. In China it's 27. Imagine having to work over 27 years to afford a house.

bamboozled 5y ago
It's like 45 in Australia.
- aembleton 5y ago
  7.27
  - bamboozled 5y ago
    There's absolutely no way a person an an average income could buy a home in Australia and pay it off in 7.27 years. Those figures are totally wrong. Many people would be lucky to save for a deposit on a place in 7.27 years.
    - 988747 5y ago
      That's not what this statistic means. It means that if you spent 0 dollars and saved all your income you would need 7.27 years to buy a house. In practice you need a mortgage, of course. But now think how bad this gets when a house price is your 40 years worth of income...
    - nostrebored 5y ago
      This view is detached from reality. Not every house is in the eastern suburbs of Sydney and lower quartile income in Australia is extremely high.
      - bamboozled 5y ago
        I could buy a house at the end of a run way for cheap, or in a desert, but no one wants to live there.
        nostrebored 5y ago
        There are 80 two bedroom properties for sale right now in the inner west of Sydney that line up to less than 12 years of minimum wage salary at recommended prices.
        bamboozled 5y ago
        How much do they cost ?
    - AussieWog93 5y ago
      As someone else pointed out, these are national averages (Sydney/Melbourne are far higher than this). It's also a simple measure of income to property price, and not indicative of how long it takes to be pay off a mortgage.
mstaoru 5y ago
And yet... https://en.wikipedia.org/wiki/List_of_countries_by_home_ownership_rate https://en.wikipedia.org/wiki/List_of_countries_by_home_owne... — China has over 92% (newer stat) home ownership rate.
pfortuny 5y ago
Great link, thanks. Surprised at the US ratio!
- rtkwe 5y ago
  I wonder if those numbers average by locality, seems like you would need to or it would get skewed by cheap real estate where people that live and work in expensive cities can't access (until companies embrace WFH and stop indulging management's obsession with butts in seats). Houses out in the country can be a great deal with a city income but it's tough to bring those two together.
jhoechtl 5y ago
This is a very simplistic view. I live in Austria. Believe me - houses are built very differently here. There are strict and severe regulations, governing the safety of the building, low energy consumption. Therefore houses are expensive. But they are built to last for generations. And I am not talking about the requirement of building a sturdier structure because of more cold weather conditions. This is in stark contrast to the private houses I know of the US which may be even hauled from A to B and in my perception are more of cardboard-quality.
- lotsofpulp 5y ago
  The view that US houses are cardboard-quality is a very simplistic view. There is nothing inherently wrong with stick built houses using drywall.
  - pinko 5y ago
    (not a rhetorical question) Won't stick+drywall houses require more diligent maintenance in order to stand 500 years? E.g., new asphalt roofs, etc. It's not unusual for homes in Europe to last that long with major maintenance needed every hundred+ years rather than every thirty. It also seems like the impact of deferred maintenance is lower on stone+clay homes (e.g., you can realistically restore a stone farmhouse that's gone to ruin more easily than a stick+drywall house that has), no? My sense is that the 500-year TCO is many times higher (maybe as much as an order of magnitude) for US-style homes.
    - whafro 5y ago
      They may require more maintenance, but that maintenance may also be lighter. You could also argue that this type of construction allows more room for generational upgrades than those expected to last 500 years. Integrating PV solar into the roof might be a more reasonable proposition if you know you're planning to replace the roof in a few years. If you don't expect to have to replace it for several more decades, you're less likely to make that investment. This also applies to insulation, air sealing, electrical upgrades, etc.
    - 5y ago
AussieWog93 5y ago
Honestly shocked to see Australia and Canada at 97th and 98th on that list, as well as New Zealand at 94th. I thought we all had it really bad. Apparently not.
- nostrebored 5y ago
  So part of what makes it feel bad is the difference in loan structures. People do not have to pay 50% down in most of the US.
  - AussieWog93 5y ago
    Where do people pay 50% down on a loan? In Australia, it used to be 20% but now can be as low as 5-10% if you pay an additional fee.
    - nostrebored 5y ago
      Maybe it was just as an foreign resident my obligations were different, but I only looked into it briefly
mdorazio 5y ago
This is misleading and not very useful. Property and incomes are very local, so looking at the data at a country level doesn't tell you much. For example, in the US there is a massive variance in the ratio between different cities [1] and between cities and rural areas. Your China example is a great one for where the data especially falls apart - China has a very large rural, poor population while the large cities have grown significantly more affluent with prices and salaries to match. [1] https://archive.md/aU31p https://archive.md/aU31p
- zadwang 5y ago
  I suppose the data was an average. If only considering the big cities the ration would be much higher then (even worse).
  - esrauch 5y ago
    I think his point was that it's more likely taking the total income and total property costs and computing the average that way. But if you instead compute the same per-city and then look at the middle of those it can give you a drastically different value.
  - joshgachnang 5y ago
    No, the ratio is lower in cities [1], only 16.9 in Beijing, which has the highest city ratio. I'm guessing because of the very large poor population, it drags the average income down, whereas people in cities aren't making poor farmer wages, so the individual city ratios are lower. [1]: https://www.lincolninst.edu/sites/default/files/pubfiles/sun_wp20ls1.pdf https://www.lincolninst.edu/sites/default/files/pubfiles/sun... see page 11
  - jjk166 5y ago
    No, in the cities the incomes are also far higher than in the rural areas. The overall effect is the result of Simpson's paradox [0] https://en.wikipedia.org/wiki/Simpson's_paradox https://en.wikipedia.org/wiki/Simpson's_paradox
  - daoismyname 5y ago
polycaster 5y ago
Very interesting. Ghana prices are completely bonkers. You have to work 100+ years to own property. Despite a expected life span of ~62 years and a population density somewhere in the middle grounds. Something went utterly wrong I'd say.
- robotbikes 5y ago
  I can only guess that it probably has something to do with low incomes of a lot of citizens and foreign investors buying land/property. It could also be something akin to very low average income for rural residents mixed with a relatively affluent urban society and a huge gap between the haves and have-nots.
JamesSwift 5y ago
Its pretty uncommon to own a home in China. Much more likely to be a communal housing complex or apartment.
- selestify 5y ago
  Someone just posted that the ownership rate is 89% (apparently 92% as of newer data): https://en.wikipedia.org/wiki/List_of_countries_by_home_ownership_rate https://en.wikipedia.org/wiki/List_of_countries_by_home_owne...
  - mads 5y ago
    I think the rural parts of china is driving those stats.
  - JamesSwift 5y ago
    I tried to check the source but it doesnt list it. My knowledge is mostly anecdotal so could be wrong but I would be incredibly surprised if the stat you reference was accurate.
t8e56vd4ih 5y ago
are u stupid or a troll? lmao ... the average citizen in murica can pay off a house or apartment in 4 years? it should be obvious to everybody not living in a rich people bubble that there's something very misleading about your little statistic.
- fasteddie31003 5y ago
  If 100% of your salary went to paying off the house, I think it's pretty accurate.
- thehappypm 5y ago
  I mean.. $200k entry level house for someone making $50k on the low end.. $1M house for someone making $250k.. kinda makes sense
- mrep 5y ago
  I think you are the one living in the bubble. Take a look outside the west coast and northeast and there are new houses popping up all the time keeping house prices down because there are no geographical constraints [0]. [0]: https://www.supermoney.com/inflation-adjusted-home-prices/ https://www.supermoney.com/inflation-adjusted-home-prices/
ppier 5y ago
This seems like an odd bro-math stat? It seems to assume everyone is married, for one. Can someone tell me why such a trivially-calculated and easily-cooked example is useful here? Is there a source for their numbers? Also, why are they saying “disposable income” when what they mean is _all their income_? From their info page: “Note that there is no standard formula to calculate property price indices. Our formulas differs from Case-Shiller Index, UK Housing Price Index, etc. Price to Income Ratio is the basic measure for apartment purchase affordability (lower is better). It is generally calculated as the ratio of median apartment prices to median familial disposable income, expressed as years of income (although variations are used also elsewhere). Our formula assumes and uses: - net disposable family income, as defined as 1.5 * the average net salary (50% is assumed percentage of women in the workforce) - median apartment size is 90 square meters price per square meter (the formula uses) is the average price of square meter in the city center and outside of the city center ...”
refurb 5y ago
So I lived in a SE Asian country and saw this first hand. There is no equity market (that you can trust), bonds pay nothing so property is what you invest in (or you just sit on cash that is rapidly losing value during to inflation). Ownership is recognized even by corrupt bureaucrats and courts. Ownership papers are next to sacred documents. And no property tax so zero holding costs. The perfect investment. No legally defined ownership? No problem! The developer is working on it. They just need $30,000 USD down to secure a plot. Ownership papers will follow. So you pile your savings into real estate. You dump every single dollar you have into speculative real estate developments.. A single family home 10 km from a major city costs more than it does in California (~$1.5M USD) and local median wages are 1/10th that of the US. You can visit developments that are nothing more than 100 homes that are concrete shells with rusting window frames. Maybe 1% occupied. But don’t get me wrong, some developments fill up super quick. But some just die. Want to rent a place? Fuck you. Owners aren’t banking on rent, so pay them $3k per month. It’s all about appreciation. They would be happy to leave it empty. Less hassle that way. Seems like a recipe for a major housing crash.
- NhanH 5y ago
  So… Vietnam?
  - latchkey 5y ago
    100% on point.
    - dav43 5y ago
      And Singapore
      - seanmcdirmid 5y ago
        Singapore at least has a decent public housing purchasing system. Not perfect by far, but it seems to be the best solution out there so far.
    - 5y ago
hourislate 5y ago
Imagine not living long enough to ever afford a house. You can't by a tear down in Toronto, Vancouver, Montreal, etc for under a million. Houses rise in value at a rate of about $$1500-2000 a week (for years) while wages have been stagnant for decades. You could have bought a house for 450k-500k in 2005 and sold today for 2 million. I've seen condos that were 175k in 2006 sell for 850k today. You can't even buy a shack out side the city for less than 500k and most are going for over a million or two. Average price of a house in Toronto will be over 4-5 million in the next decade while the average wage will still be 45-65k.
- honkdaddy 5y ago
  You can absolutely buy a teardown in Montreal for under a million. You can actually buy a really nice house in a decent neighbourhood for under a million. https://www.realtor.ca/real-estate/23885137/80-49e-avenue-montr%C3%A9al-lachine-west https://www.realtor.ca/real-estate/23885137/80-49e-avenue-mo...
  - hourislate 5y ago
    Montreal is a little late to the party. I think the fact that the weather and English speakers aren't competing for Real Estate there has slowed the rise in price. It's only a matter of time. But really, 730k for a 3 bedroom/1 bathroom/ 1954 starter home? They didn't even list the sq/ft of the house (the entire lot is 5k sq/ft) it's so small, my guess is it's no more than 1500 sq/ft. Anyway, give it another year or two, it will get there.
deleted 5y ago
[deleted]

bamboozled 5y ago

It's like 45 in Australia.

aembleton 5y ago
7.27
- bamboozled 5y ago
  There's absolutely no way a person an an average income could buy a home in Australia and pay it off in 7.27 years. Those figures are totally wrong. Many people would be lucky to save for a deposit on a place in 7.27 years.
  - 988747 5y ago
    That's not what this statistic means. It means that if you spent 0 dollars and saved all your income you would need 7.27 years to buy a house. In practice you need a mortgage, of course. But now think how bad this gets when a house price is your 40 years worth of income...
  - nostrebored 5y ago
    This view is detached from reality. Not every house is in the eastern suburbs of Sydney and lower quartile income in Australia is extremely high.
    - bamboozled 5y ago
      I could buy a house at the end of a run way for cheap, or in a desert, but no one wants to live there.
      - nostrebored 5y ago
        There are 80 two bedroom properties for sale right now in the inner west of Sydney that line up to less than 12 years of minimum wage salary at recommended prices.
        bamboozled 5y ago
        How much do they cost ?
  - AussieWog93 5y ago
    As someone else pointed out, these are national averages (Sydney/Melbourne are far higher than this). It's also a simple measure of income to property price, and not indicative of how long it takes to be pay off a mortgage.

mstaoru 5y ago

And yet... https://en.wikipedia.org/wiki/List_of_countries_by_home_ownership_rate https://en.wikipedia.org/wiki/List_of_countries_by_home_owne... — China has over 92% (newer stat) home ownership rate.

pfortuny 5y ago

Great link, thanks. Surprised at the US ratio!

rtkwe 5y ago
I wonder if those numbers average by locality, seems like you would need to or it would get skewed by cheap real estate where people that live and work in expensive cities can't access (until companies embrace WFH and stop indulging management's obsession with butts in seats). Houses out in the country can be a great deal with a city income but it's tough to bring those two together.

jhoechtl 5y ago

This is a very simplistic view. I live in Austria. Believe me - houses are built very differently here. There are strict and severe regulations, governing the safety of the building, low energy consumption. Therefore houses are expensive. But they are built to last for generations. And I am not talking about the requirement of building a sturdier structure because of more cold weather conditions. This is in stark contrast to the private houses I know of the US which may be even hauled from A to B and in my perception are more of cardboard-quality.

lotsofpulp 5y ago
The view that US houses are cardboard-quality is a very simplistic view. There is nothing inherently wrong with stick built houses using drywall.
- pinko 5y ago
  (not a rhetorical question) Won't stick+drywall houses require more diligent maintenance in order to stand 500 years? E.g., new asphalt roofs, etc. It's not unusual for homes in Europe to last that long with major maintenance needed every hundred+ years rather than every thirty. It also seems like the impact of deferred maintenance is lower on stone+clay homes (e.g., you can realistically restore a stone farmhouse that's gone to ruin more easily than a stick+drywall house that has), no? My sense is that the 500-year TCO is many times higher (maybe as much as an order of magnitude) for US-style homes.
  - whafro 5y ago
    They may require more maintenance, but that maintenance may also be lighter. You could also argue that this type of construction allows more room for generational upgrades than those expected to last 500 years. Integrating PV solar into the roof might be a more reasonable proposition if you know you're planning to replace the roof in a few years. If you don't expect to have to replace it for several more decades, you're less likely to make that investment. This also applies to insulation, air sealing, electrical upgrades, etc.
  - 5y ago

AussieWog93 5y ago

Honestly shocked to see Australia and Canada at 97th and 98th on that list, as well as New Zealand at 94th. I thought we all had it really bad. Apparently not.

nostrebored 5y ago
So part of what makes it feel bad is the difference in loan structures. People do not have to pay 50% down in most of the US.
- AussieWog93 5y ago
  Where do people pay 50% down on a loan? In Australia, it used to be 20% but now can be as low as 5-10% if you pay an additional fee.
  - nostrebored 5y ago
    Maybe it was just as an foreign resident my obligations were different, but I only looked into it briefly

mdorazio 5y ago

This is misleading and not very useful. Property and incomes are very local, so looking at the data at a country level doesn't tell you much. For example, in the US there is a massive variance in the ratio between different cities [1] and between cities and rural areas. Your China example is a great one for where the data especially falls apart - China has a very large rural, poor population while the large cities have grown significantly more affluent with prices and salaries to match. [1] https://archive.md/aU31p https://archive.md/aU31p

zadwang 5y ago
I suppose the data was an average. If only considering the big cities the ration would be much higher then (even worse).
- esrauch 5y ago
  I think his point was that it's more likely taking the total income and total property costs and computing the average that way. But if you instead compute the same per-city and then look at the middle of those it can give you a drastically different value.
- joshgachnang 5y ago
  No, the ratio is lower in cities [1], only 16.9 in Beijing, which has the highest city ratio. I'm guessing because of the very large poor population, it drags the average income down, whereas people in cities aren't making poor farmer wages, so the individual city ratios are lower. [1]: https://www.lincolninst.edu/sites/default/files/pubfiles/sun_wp20ls1.pdf https://www.lincolninst.edu/sites/default/files/pubfiles/sun... see page 11
- jjk166 5y ago
  No, in the cities the incomes are also far higher than in the rural areas. The overall effect is the result of Simpson's paradox [0] https://en.wikipedia.org/wiki/Simpson's_paradox https://en.wikipedia.org/wiki/Simpson's_paradox
- daoismyname 5y ago

polycaster 5y ago

Very interesting. Ghana prices are completely bonkers. You have to work 100+ years to own property. Despite a expected life span of ~62 years and a population density somewhere in the middle grounds. Something went utterly wrong I'd say.

robotbikes 5y ago
I can only guess that it probably has something to do with low incomes of a lot of citizens and foreign investors buying land/property. It could also be something akin to very low average income for rural residents mixed with a relatively affluent urban society and a huge gap between the haves and have-nots.

JamesSwift 5y ago

Its pretty uncommon to own a home in China. Much more likely to be a communal housing complex or apartment.

selestify 5y ago
Someone just posted that the ownership rate is 89% (apparently 92% as of newer data): https://en.wikipedia.org/wiki/List_of_countries_by_home_ownership_rate https://en.wikipedia.org/wiki/List_of_countries_by_home_owne...
- mads 5y ago
  I think the rural parts of china is driving those stats.
- JamesSwift 5y ago
  I tried to check the source but it doesnt list it. My knowledge is mostly anecdotal so could be wrong but I would be incredibly surprised if the stat you reference was accurate.

t8e56vd4ih 5y ago

are u stupid or a troll? lmao ... the average citizen in murica can pay off a house or apartment in 4 years? it should be obvious to everybody not living in a rich people bubble that there's something very misleading about your little statistic.

fasteddie31003 5y ago
If 100% of your salary went to paying off the house, I think it's pretty accurate.
thehappypm 5y ago
I mean.. $200k entry level house for someone making $50k on the low end.. $1M house for someone making $250k.. kinda makes sense
mrep 5y ago
I think you are the one living in the bubble. Take a look outside the west coast and northeast and there are new houses popping up all the time keeping house prices down because there are no geographical constraints [0]. [0]: https://www.supermoney.com/inflation-adjusted-home-prices/ https://www.supermoney.com/inflation-adjusted-home-prices/

ppier 5y ago

This seems like an odd bro-math stat? It seems to assume everyone is married, for one. Can someone tell me why such a trivially-calculated and easily-cooked example is useful here? Is there a source for their numbers? Also, why are they saying “disposable income” when what they mean is _all their income_? From their info page: “Note that there is no standard formula to calculate property price indices. Our formulas differs from Case-Shiller Index, UK Housing Price Index, etc. Price to Income Ratio is the basic measure for apartment purchase affordability (lower is better). It is generally calculated as the ratio of median apartment prices to median familial disposable income, expressed as years of income (although variations are used also elsewhere). Our formula assumes and uses: - net disposable family income, as defined as 1.5 * the average net salary (50% is assumed percentage of women in the workforce) - median apartment size is 90 square meters price per square meter (the formula uses) is the average price of square meter in the city center and outside of the city center ...”

refurb 5y ago

So I lived in a SE Asian country and saw this first hand. There is no equity market (that you can trust), bonds pay nothing so property is what you invest in (or you just sit on cash that is rapidly losing value during to inflation). Ownership is recognized even by corrupt bureaucrats and courts. Ownership papers are next to sacred documents. And no property tax so zero holding costs. The perfect investment. No legally defined ownership? No problem! The developer is working on it. They just need $30,000 USD down to secure a plot. Ownership papers will follow. So you pile your savings into real estate. You dump every single dollar you have into speculative real estate developments.. A single family home 10 km from a major city costs more than it does in California (~$1.5M USD) and local median wages are 1/10th that of the US. You can visit developments that are nothing more than 100 homes that are concrete shells with rusting window frames. Maybe 1% occupied. But don’t get me wrong, some developments fill up super quick. But some just die. Want to rent a place? Fuck you. Owners aren’t banking on rent, so pay them $3k per month. It’s all about appreciation. They would be happy to leave it empty. Less hassle that way. Seems like a recipe for a major housing crash.

NhanH 5y ago
So… Vietnam?
- latchkey 5y ago
  100% on point.
  - dav43 5y ago
    And Singapore
    - seanmcdirmid 5y ago
      Singapore at least has a decent public housing purchasing system. Not perfect by far, but it seems to be the best solution out there so far.
  - 5y ago

hourislate 5y ago

Imagine not living long enough to ever afford a house. You can't by a tear down in Toronto, Vancouver, Montreal, etc for under a million. Houses rise in value at a rate of about $$1500-2000 a week (for years) while wages have been stagnant for decades. You could have bought a house for 450k-500k in 2005 and sold today for 2 million. I've seen condos that were 175k in 2006 sell for 850k today. You can't even buy a shack out side the city for less than 500k and most are going for over a million or two. Average price of a house in Toronto will be over 4-5 million in the next decade while the average wage will still be 45-65k.

honkdaddy 5y ago
You can absolutely buy a teardown in Montreal for under a million. You can actually buy a really nice house in a decent neighbourhood for under a million. https://www.realtor.ca/real-estate/23885137/80-49e-avenue-montr%C3%A9al-lachine-west https://www.realtor.ca/real-estate/23885137/80-49e-avenue-mo...
- hourislate 5y ago
  Montreal is a little late to the party. I think the fact that the weather and English speakers aren't competing for Real Estate there has slowed the rise in price. It's only a matter of time. But really, 730k for a 3 bedroom/1 bathroom/ 1954 starter home? They didn't even list the sq/ft of the house (the entire lot is 5k sq/ft) it's so small, my guess is it's no more than 1500 sq/ft. Anyway, give it another year or two, it will get there.

deleted 5y ago

[deleted]