Aussie cities land at the bottom of world housing affordability rankings

In the world's 20 most unaffordable cities for housing, Sydney is ranked the second least affordable major housing market after Hong Kong.

Sydney wasn't the only Australian city with housing challenges with Melbourne also topping the list of unaffordable housing markets in eighth position.

A new report prepared by the Committee for Sydney found that housing unaffordability in NSW's capital is so extreme that it is negatively affecting talent and productivity to the tune of billions of dollars.

With more than 33 per cent of renter households in housing stress and the median property price more than eight times the median household income, Sydney meets the criteria for a chronic housing crisis. That means these conditions are persistently curtailing the living and working choices of residents.

"The costs are being felt most by young Sydneysiders just starting to establish their careers, putting a handbrake on the opportunities that would have been open to them if housing in Sydney was more accessible and affordable," Committee for Sydney CEO Eamon Waterford said.

"If we don't take urgent and sustained action, chronic housing unaffordability will continue to erode Sydney's competitiveness on the global stage and our city's long-term economic success."

Previous research found police, teachers, nurses and other essential workers are being priced out of Australian capital cities as housing affordability worsens.

Hong Kong was the most unaffordable city for housing in the world followed closely by Sydney, Vancouver, Honolulu, San Jose, Los Angeles, Auckland, Melbourne, Toronto and San Diego according to the Demogrophia rankings.

The most affordable market in the world was in Pittsburgh.

The report found that Sydney risks losing 10,000 people per year from its talent base if trends continued.

Looking abroad to other unaffordable cities, the report cites the San Francisco Bay Area which has lost 15-20,000 people each year from it's workforce since becoming chronically unaffordable in the mid 2010s.

Greater London has also lost more than 15,000 people per year aged 25 to 39 since 2015 as the economic incentive to live in the British capital declines.

Renters are also leaving London in droves. The report found in the last year 40 per cent of tenants moving home chose to leave London, up from 28 per cent 10 years ago.

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The Committee for Sydney has recommended introducing an inclusionary zoning target where a percentage of land is set aside for affordable or social housing.

It is also advocating for investing in more social and affordable housing and increasing housing supply to offset the financial stress on renters and potential home owners.

"We can't solve this overnight, but we can commit to the bold, brave and long-term program required to send Sydney's chronic housing crisis into remission and stop future relapses," Mr Waterford said.

The NSW government has proposed allowing developers to build taller, higher density developments if they include at least 15 per cent affordable housing.