Housing Prices & Affordability
Real house prices in OECD economies are 38% above their 2010 level and 12% above the 2007 peak that preceded the global financial crisis. Affordability — measured against incomes — has deteriorated in almost every advanced economy, with the gap concentrated in the largest cities.
Key insights
Affordability has detached from incomes
Across the OECD, real house prices have outpaced real disposable income by about 25 percentage points since 2015. The mismatch is sharpest in countries with constrained urban supply (Australia, Canada, New Zealand, Netherlands) and least pronounced where construction has kept pace (Japan, several Eastern European markets). Affordability for first-time buyers is now the worst on record in 11 OECD members.
Cities dwarf national averages
National price-to-income ratios understate the buyer experience. Hong Kong, Sydney, Vancouver and Auckland trade above 9× median income. London sits near 8×, Paris 6×, New York 5×. Where prices are reasonable nationally (Germany, France, Spain) the gap between capital cities and the rest of the country is widest.
Higher rates broke the post-pandemic surge
After a 25% real-terms run-up in 2020–22, the mortgage shock froze transactions: volumes fell 30–50% in the US, UK, Germany, Sweden and Canada. Prices corrected 10–20% in real terms in the most leveraged markets (Sweden, Germany, NZ) and largely stalled elsewhere. The shake-out is now plateauing, but the affordability ratio remains stretched.
Real house price index — OECD aggregate (2000–2026)
2010 = 100, deflated by CPI
Key Finding: Real house prices rose 38% from 2010 to 2026. The 2007 cyclical peak was surpassed in 2017 and the post-pandemic surge added another 25% before the rate-driven correction.
Price-to-income ratio — major countries (2026)
Average home price divided by gross median household income
Key Finding: Hong Kong tops the OECD league table at 8.4×; the US sits at 3.1×, with intra-country variance hidden by the national average.
Methodology & caveats
What 'real' means
Real house price indices divide nominal prices by the consumer price index (CPI). A flat real index over a decade means prices rose at exactly the rate of general inflation; a rising real index means housing outpaced everything else in the basket.
Price-to-income limitations
The ratio compares average home price to gross median income. It does not capture mortgage rates, deposit requirements, or the gap between median and entry-level prices. A 5× ratio at 3% mortgage rates is far more affordable than a 4× ratio at 7%. Use it as a relative gauge, not an absolute affordability threshold.
Sources and revisions
The OECD harmonises national data into the Analytical House Prices dataset on a quarterly lag. The IMF Global House Price Index aggregates the same data with simple GDP-weighted averaging. National statistical offices use a mix of transaction prices (UK Land Registry, France Notaires) and asking prices (Zillow, Idealista) which is why direct cross-country comparisons should always rely on the OECD harmonised series.