The Commonwealth Bank of Australia/UBS-Demographia Data Dispute

According to The Age:

Investment forums and housing blogs were alive with talk yesterday that an 18-page presentation used by the bank had replaced unfavourable housing affordability figures with data showing housing costs were not out of step with other cities in the world.

One slide compared Australian housing affordability to several cities, citing figures from a combination of the US urban planning research house Demographia and the investment bank UBS.
The slide showed housing in Sydney and Melbourne was more affordable than cities such as San Francisco, New York and Vancouver. But it used UBS data exclusively for the Australian cities, and Demographia data for the overseas cities.

The data were not comparable. Commonwealth relied upon Median Multiple data (median house price divided by median household income) from the 6th Annual Demographia Housing Affordability Survey for international metropolitan areas. However, Commonwealth used a median/average multiple (median house price divided by average household income) calculated by UBS, the Swiss investment house, for Australian metropolitan areas. These are very different indicators.


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