Sydney houses are so ‘severely unaffordable’, it’s cheaper to buy in New York

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Buying a home in New York is easier on the wallet than in Sydney, according to the 13th Annual Demographia International Housing Affordability Survey.

The analysis puts Sydney in the “severely unaffordable” bracket for middle income earners and the second most expensive in the world behind Hong Kong.

The survey, which rates middle-income housing affordability by dividing the median house price by median household income, shows there are 26 severely unaffordable major housing markets in the world.

Hong Kong is the least affordable with a median multiple of 18.1, down from 19 last year.

Sydney is again second at 12.2, the same median multiple as last year. The survey lists the median home price at $A1.4 million and median income of $A88,000.

The numbers mean that a house in Sydney will cost a middle income earner about 12.2 times their annual salary.

By comparison New York has a median multiple of 5.7, a median home price of $US397,600 ($A522,000) and income of $US70,200 ($A92,000).

Sydney house prices increased by 15.5% in 2016, according to industry analysts CoreLogic, while national wages grew at less than 2%, the slowest pace on record.

“High house prices are not a sign of city’s success but a sign of failure,” says Oliver Hartwich, executive director of the New Zealand Initiative, a public policy research group, in the introduction to the Demographia survey.

“High house prices are not a sign of city’s success but a sign of failure.

“Unaffordable housing is almost everywhere and every time caused by the same factor: housing supply restrictions.”

The survey shows Vancouver is third least affordable, at 11.8, where house prices rose the equivalent of a full year’s household income in only a year.

Auckland is fourth least affordable at 10 and San Jose in the US has a median multiple of 9.6.

The least affordable 10 also includes Melbourne (9.5), Honolulu (9.4), Los Angeles (9.3), San Francisco (9.2) and Bournemouth in the UK (8.9).