Sydney is second in the world only to Hong Kong for having the most severely unafforadbale homes, according to the 4th Annual Demographia International Housing Affordability Survey.
The survey rates 293 markets for middle-income affordability using the Median Multiple, a ratio of the median house price by the median gross before tax annual household income.
The analysis shows Sydney with a Median Multiple of 12.9. More than 5 is considered severely unaffordable.
This chart shows the global rankings:
But it's not just Australia's biggest city which is unaffordable. Most of the rest of the Australia is in the expensive category compared to the rest of the world.
"All of Australia's five major housing markets are severely unaffordable," says the report by Demographia, as this chart shows:
Melbourne has a Median Multiple of 9.9, Adelaide 6.6, Brisbane is 6.2 and Perth 5.9.
Housing affordability has become a hot political topic in Australia, especially in Sydney and Melboiurne where a hot property market has pushed those who would have been first home buyers out of the game.
Australia’s Housing Industry Association says affordability in Sydney has reached a critical level.
On average, Australian households with two income earners taking out an 80% loan-to-value loan, needed 28.7% of their monthly income to meet monthly mortgage repayments, according to Moody’s Investors Service.
Last year's federal budget announced a series of measures, including making it easier to save for a home deposit, encouraging older Australians to move to smaller places and taking out some of the perks which make negative gearing such a lucrative way to invest.