Yes, San Francisco is unaffordable, but 3rd least is an exaggeration:
-This does not include the entire world, just cities in English-speaking (+Japan for some reason) developed countries with metro areas exceeding 1M people.
-Comparing different MSAs is not exactly apples and apples. The New York MSA extends to Pike County, 80 miles from Manhattan. Under this definition, you could start including lower-cost Sacramento and Stockton with San Francisco.
I was just going to comment...Beijing is way more unaffordable than Hong Kong when median income is considered! Also, both Vancouver and Hong Kong (and to a much less extent, SF) are being invaded by mainland speculators, so the problems are all quite related.
Rents are much more reasonable though, so the term "affordable" based on property speculation is quite weird (though HK is quite expensive in rent also).
The banking system isn't that developed and people are used to paying in cash, even if you buy a house here your downpayment is likely to be 50% of the house's value.
There is a lot of gray money flowing into foreign, some of it actually corrupt, but much of it just very gray. Some of it is real money, with no other way to invest RMB domestically (domestic real estate is a basket case, stock market...ha!), many just look abroad for investment opportunities and aren't too creative about it.
When this was in the news in NZ, there was a good series of posts on a local blog with some criticism of the way the survey is constructed: [1] [2] [3]
Demographia itself has a certain ideological bent (go read the introduction to the survey!). NZ readers will also recognize both NZers represented as current and former members of the right(er)-wing National Party.
The impression I get is that these statistics are constructed to support existing policy, not in order to inform the development of policy.
3rd least is NOT an exaggeration, it is straight from the paper you linked to (bottom of page 10.) It is third in the AUTHOR's chosen metric: "Median Multiple" which compares raw price to income.
A valid criticism would be that this is really measuring debt/rent tolerance in the target markets, but I digress.
"3rd least in the world" is an exaggeration. "3rd least among Australia, Canada, Hong Kong, Ireland, Japan, New Zealand, Singapore, UK, and USA" would be valid.
Yes, San Francisco is unaffordable, but 3rd least is an exaggeration:
-This does not include the entire world, just cities in English-speaking (+Japan for some reason) developed countries with metro areas exceeding 1M people.
-By most measures (http://www.theatlantic.com/business/archive/2013/07/china-ha...), Shanghai, Shenzhen, and Beijing have worse housing affordability than the English-speaking #1 of Hong Kong.
-This is using the SF-Oakland MSA (http://en.wikipedia.org/wiki/San_Francisco%E2%80%93Oakland%E...), which is far broader than San Francisco itself.
-Comparing different MSAs is not exactly apples and apples. The New York MSA extends to Pike County, 80 miles from Manhattan. Under this definition, you could start including lower-cost Sacramento and Stockton with San Francisco.