New Zealand has been named the seventh most expensive country in which to buy a house.
Price comparison website Compare the Market looked at average property prices per square metre and average disposable household income to calculate the cost per square metre as a percentage of annual income.
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Turkey was the most affordable country to buy property, with a house price to income ratio of 4.2 percent, followed closely by the US and Russia.
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New Zealand's house price to income ratio was 17.6 percent, just below the UK in affordability.
South Korea is the least affordable country to buy a home, with a house price to income ratio of nearly 40 percent. Australia's ratio was 14.3 percent.
The figures come as New Zealand's housing market enters boom territory and the Government faces questions on rising house prices.
Real estate agents OneRoof talked to yesterday were not surprised by the survey's results.
Houses in South Korea’s capital Seoul. The country is the most expensive place to buy a house. Photo / Getty Images
Bayleys agent David Rainbow, who sells property in one of the county's most sought-after suburbs, says property in New Zealand has always been a stretch for buyers, especially for those looking to buy in popular areas.
“We’ve always been expensive. When I bought my first house 46 years ago, I struggled to get it. I sold all the nice things and put in flat mates. It was never easy.”
A lot of people are trying to buy the property equivalent of a Rolls Royce when all they can afford is a Toyota Corolla.
“People have a love affair with houses and cars. They often borrow a lot more money than they can afford,” he says.
Tom Rawson, business owner of Ray White Manukau, in South Auckland, says the average household income for a couple looking for a property in his patch is around $150,000 and the average sales price is $850,000.
“The house prices have gone up 20 per cent so far this year and the income hasn’t. It’s been flat if not backwards,” he says.
Turkey’s capital Istanbul. The country has identified as the most affordable place to buy a home. Photo / Getty Images
However, historically low interest rates are the reason buyers have been so active, Rawson says.
But increased activity means more competition, which has pushed up prices in even the most affordable areas.
"Properties are selling quickly and everything is being listed for auction so you don’t even get a good guide to what things are worth,” Rawson says.
Bayleys agent Linda Simmons, who sells homes on Auckland's North Shore, says a lot of homes are still too expensive for many families.
“It’s getting to the point where homes are becoming out of reach for a lot of people and it’s not wonderful.”
Simmons says it’s really challenging for locals to get into the current market with values climbing up and expats coming back.
“The lifestyle here [on the North Shore] is so fantastic with the beaches and all the freedom we have here and it’s definitely attracting a lot of expats to come back home, who see value in that,” she says.
