Soaring prices have pushed Australian houses into the ranks of the world's most expensive, with a home in Sydney less affordable than its New York or London equivalent, new research shows.

Sydney is now the seventh least affordable city on earth, with other Australian cities such as Perth, Hobart and Melbourne not far behind, according to the Annual Demographia International Housing Affordability Survey.

The study of 159 locations in Australia, Canada, Ireland, New Zealand, the United Kingdom and the United States found that housing in every city Down Under was either seriously or severely unaffordable when compared to household incomes.

A decade ago, the average Australian home cost roughly four to five times the median annual household income. But a shortage of zoned residential land and higher property taxes and levies have pushed the median house price in Sydney to 8.5 times household income, the survey found.

The west coast city of Perth is Australia's second toughest property market (8.0 times household income), followed by Hobart (7.0 times) and Melbourne (6.6 times).

In comparison, housing in London was 8.3 times household income and in New York, 7.2 times, according to the survey released by the US-based Wendell Cox Consultancy.

Australian studies back up the findings. A recent Housing Industry Association (HIA) survey found that home affordability had hit a record low because of a shortage of housing stock and three interest rate rises in 2006.

A first-time home buyer was paying a median price of 376,000 dollars (296,760 US) for their home in late 2006, a significant increase on the 361,500 dollar median price of the previous quarter, the HIA study said.

Monthly mortgage repayments have also jumped to more than 30 percent of total first-home buyer income, to 2,332 dollars, it found.

Ross Elliott, head of Australia's Residential Development Council, said the country's property market was in crisis because of poor planning, excessive government levies and taxes and a shortage of residential zoned land in a country where home ownership is about 70 percent.

Meanwhile, wage increases were far outstripped by rocketing property prices, he said.

"Clearly, that's disenfranchising a lot of people out of the housing market," he told AFP.

Elliott, whose organisation represents developers, said the taxes imposed on a newly-built, 570,000 dollar, four-bedroom Sydney home would amount to 160,000 dollars, while a further 30,000 dollars would be spent on compliance fees.

This was pricing developers out of the market and into the construction of commercial properties, he said.

Ken Morrison, of the Property Council of Australia, said the shortage of residential land in Australia's biggest city was a significant factor in creating higher property prices.

"Over the last decade and a half we've had a lack of land supply in Sydney," he said. "There hasn't been sufficient growth to meet underlying demand.

"In the last 12 months the government has realised it's got that wrong and has been starting to rezone more land."

But ultimately property would remain in demand in the country's harbour city Sydney because of its employment and lifestyle opportunities, he said.

"There's no doubt also that one of the reasons Sydney is expensive is that... it's a successful city and people want to live here," Morrison said.