Median multiple
The Median multiple or Median house price to income ratio is a housing indicator used to indicate the affordability of housing in any given community.[1] The Median house price to income ratio WAS the primary indicator H1 of the 1991 World Bank/UNCHS Housing Indicator system.[2][3] It was subsequently used as a measure of affordability by the UN Commission for Sustainable Development, the National Association of Realtors, State of the Environment 2003 Tasmania; and the Mortgage Guide UK.[4]
The indicator has been popularised by Demographia International, and was called the 'Median multiple' from their second comparative international survey in 2006.[5]
The median multiple is the ratio of the median house price by the median gross (before tax) annual household income. This measure has historically hovered around a value of 3 or less, but in recent years has risen dramatically, especially in markets with public policy constraints on land and development.[6]
Table
[edit]The International Housing Affordability Survey uses the following table to determine affordability ratings:[7]
| Rating | Median multiple |
|---|---|
| Severely unaffordable | 5.1 and over |
| Seriously unaffordable | 4.1 to 5.0 |
| Moderately unaffordable | 3.1 to 4.0 |
| Affordable | 3.0 and under |
See also
[edit]- Real-estate bubble#Housing affordability measures
- Affordable housing
- Inclusionary zoning
- Land-use planning
- Land titling
- Real estate
References
[edit]- ^ "Real Estate Bubbles and the "Median Multiple Index"". Ted's Blog. Retrieved 2016-02-13.[permanent dead link]
- ^ "The Housing Indicators Program". World Bank. Retrieved 13 February 2016.
- ^ Angel, Shlomo (2000-10-20). Housing Policy Matters: A Global Analysis. Oxford University Press, USA. ISBN 9780195350326.
- ^ "Ratio of House Prices to Income". UK's Mortgage Guide. 2017-10-09. Retrieved 2022-05-09.
- ^ "2nd Annual Demographia International Housing Affordability Survey: 2006" (PDF). Demographia. 2006. Retrieved 9 May 2022.
- ^ "10th Annual Demographia International Housing Affordability Survey: 2014" (PDF). Retrieved 13 February 2016.
- ^ "12th Annual Demographia International Housing Affordability Survey: 2016" (PDF). Retrieved 13 February 2016.