Australian homes 'among world's least affordable'

Australian and New Zealand homes are the least affordable in the English-speaking world, according to a US-based survey of 227 cities.
The 2008 Demographia study of international housing affordability listed 18 Australian cities in its top 50 of severely unaffordable markets.
The study rates housing affordability in the English-speaking nations of Australia, New Zealand, Canada, US, UK and Ireland.
The least affordable city in Australia is Mandurah (sixth-least affordable overall), south of Perth, where houses cost 9.5 times a household's average annual income, with Sydney (8.6), Perth (7.6) and Melbourne (7.3) in 11th, 19th and 22nd place overall.
Demographia rates a city's housing market "affordable" when the cost of an average home is three (or less) times average household income, "unaffordable" for four times the average and "seriously unaffordable" for five times.
The Property Council of Australia said state governments needed to release more land, cut back on developer taxes and reduce red tape.
"Australia's dismal performance highlights the need to reverse the policies that created today's artificially inflated house prices", council chief executive Peter Verwer said.
"The survey backs the property council's view that the affordability crisis is caused by land rationing, excessive development charges and dysfunctional development assessment.
"The response of some state governments shows the message is getting through, however, the survey results show more urgent action is required.
"The new Rudd government has demonstrated much needed leadership in committing to five major programs aimed at improving housing affordability."
Only US and Canadian cities featured in the top 50 affordable cities, including Dallas and Kansas in the US and Quebec in Canada.
"The survey tells us there are plenty of affordable cities in the world, it's just that none of them are in Australia", Mr Verwer said.
"On average, Australian families are forced to spend 6.1 times their entire household income to buy a typical home compared with 3.1 times in Canada and 3.6 times in the US, and that's before interest charges."
The survey found the top five least affordable cities in the world included four Californian cities led by Los Angeles, along with Salinas, San Francisco and San Diego with Honolulu in Hawaii coming in at number four.
The survey can be found at www.demographia.com.

©AAP 2008