Australia and New Zealand are experiencing the most severe affordability crisis among English-speaking countries, according to a report by Demographia.

The report said there are virtually no "affordable" markets in Australia, with 25 of the nation's 28 markets - including all of the large capital cities - rating "severely unaffordable". The other three smaller markets - including Maitland, Ballarat and Bendigo - were rated "seriously unaffordable". This compares to Canada which has 13 affordable markets and the US with 46 affordable markets. New Zealand is the only country among those surveyed in which all of its markets are rated "severely unaffordable".

The sharp increase in house prices in Australia and New Zealand has pushed housing affordability to 6.3 times the annual household earnings. This compares with the UK at 5.5 times and the US at 3.6 times.

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 situation is absurd, considering that when a New Zealand or Australian household buys a house, they're paying more for the actual house than their counterparts in Atlanta, Houston, Dallas Fort Worth and Indianapolis are paying for their houses and mortgage interest charges combined," said Wendell Cox, co author of the Annual Demographia Survey. "Little wonder the younger generation of New Zealanders and Australians are referred to as the 'lost generation to homeownership'."

With a mortgage, Australians can expect 17.9 years of income to go towards house cost and mortgage interest, based on a 100% 30-year mortgage. In comparison, Canadians take 7.9 years and New Zealanders take the longest at 18.6 years.