New Zealand is crowned the 6th least affordable country to buy property in the world

PHOTO: New Zealand has lost what is was always known for. A country with affordable housing. FILE

New research reveals New Zealand is the 6th least affordable country to buy a property in the world.

The study by Compare the Market analysed average property prices per square metre as well as, the average disposable household income in each country to calculate the cost per square metre as a percentage of annual income.

The top 10 least affordable countries to buy a property in:

Rank	Country	Average Annual Disposable Household Income (USD)	Average Property Price per m2 (USD)	Property Price (per m2) to Income %
1	South Korea	$21,882	$12,989.34	59.4%
2	Israel	$24,863	$7,598.98	30.6%
3	Luxembourg	$39,264	$11,354.86	28.9%
4	Switzerland	$37,466	$10,575.06	28.2%
5	Japan	$29,798	$6,086.83	20.4%
6	New Zealand	$25,074	$4,461.47	17.8%
7	Czech Republic	$21,453	$3,698.74	17.2%
8	United Kingdom	$28,715	$4,877.81	17.0%
9	France	$31,304	$5,177.30	16.5%
10	Denmark	$29,606	$4,859.78	16.4%

The least affordable country was South Korea. It has the highest price per square metre, at US$12,989.34 and with an average household disposable income of US$21,882, the affordability ratio came to around 59.4%.

In second place for the most affordable country was Israel. Although Israel has a lower property price of US$7,598.98 per square metre, it has an average disposable income of US$24,863, meaning the affordability ratio came to around 30.6%.

The third most affordable country was Luxembourg, with an affordability ratio of 28.9%, not much further behind Israel. The average disposable income in Luxembourg is fairly high compared to other countries at an average of US$39,264, alongside the property price averaging around US$11,354.86 per square metre.

Stephen Zeller, General Manager of Home and Contents Insurance at Compare the Market says:

“Trying to buy a property right now is harder than it’s ever been, largely thanks to the pandemic in particular. Whilst property prices, costs of living and property shortages are reaching new highs, wages and disposable income has struggled to keep up which means that for some, the property buying process may at times feel impossible.

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“However, annual incomes and property prices vary a lot from one country to the next, and so it’s not bad news for everyone, especially for the countries that rank in the topmost affordable places to buy property.

“The same can also be said for countries where affordability has plunged. Buyers can still have some luck finding areas with accessible housing if they are willing to sacrifice on proximity to major metropolitan areas, as an example.”

You can find the full findings here.