Properties in Maitland, NSW are the most affordable in the country, costing just 4.8 times the median local wage, according to the latest report by Demographia.

Coming in second equal were Ballarat in Victoria and Bendigo in Queensland, where each of the median house prices reached five times the median salary. The best performing state capital was Canberra, which came in fifth position overall.

Despite being Australia's most affordable cities, all of the top five were ranked 'seriously unaffordable' by the report.

Maitland ranked 125th against US, Canadian, UK, New Zealand and Irish cities in terms of affordability - well behind cities such as Houston, Ottawa and Montreal.

Demographia rated urban markets as 'severely unaffordable' when house prices were more than five times the household income, 'seriously unaffordable' when prices were five times or less the household income, and 'moderately unaffordable' when they were four times or less.

The report identified artificial government restrictions and taxes as being the principal factors causing housing in Australia to be nearly double the relative cost of housing in Canada or the US. It also identifies the migration effect that cities' prices are having on their populations. One example is how much better off a family would be moving from Sydney to Adelaide (nearly $650,000 in purchase and mortgage costs) or to Ballarat ($930,000 or 21 years of Ballarat median income).

Australia's least affordable cities are Mandurah, which placed sixth worldwide in the survey, closely followed by the Sunshine Coast at seventh overall, and Sydney and the Gold Coast at 11th equal worst.

To download a full copy of the report, follow the link below:

http://www.demographia.com/dhi-ix2005q3.pdf

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