Housing affordability is the relative ability for households to purchase housing without overextending their financial means or having to forego essential goods and services. This is generally measured by comparing the prices of homes relative to the incomes of households in a given area.
In the last decade, the affordability of housing has rapidly declined worldwide, particularly in dense, urban environments. Cities around the world are struggling to balance development and a growing population with sufficient housing supply to maintain reasonable levels of housing affordability, however, Sydney has consistently ranked in the top five most unaffordable cities in the world.
Housing affordability has now reached crisis levels, and housing bubbles are becoming more frequent, even after the painful lessons brought upon by the 2008 Great Recession brought on by the US mortgage crisis.
How can we avoid this in the future to make housing more affordable for everyone?