Auckland is now ranked the fourth least-affordable housing market in the world.
The Demographia International Housing Affordability Survey, released on Monday, analysed 92 major housing markets. Auckland has jumped up one spot, rising from fifth in 2015.
Since 2012, Auckland's housing market has inflated from almost seven times the median household income to 10. Eight cities in New Zealand are identified as seriously or severely unaffordable.
Bernie Smith, head of social housing provider Monte Cecilia Housing Trust, says the shift is no surprise.
"We saw many headlines throughout 2016 of highly skilled and competent people having to leave Auckland, because they just can't afford to live in Auckland. That's pretty sad."
Mr Smith says it's going to take a huge effort to correct the upward trend.
"There needs to be some real collaboration around those that have creative ideas, those that have the money. Central and local government should be fully supportive and put their hands in their pockets as well."
Auckland house prices appear to have stabilised in recent months, after years of rises following the global financial crisis.
Barfoot & Thompson reports the median sale price in December was $840,000. According to government valuer QV, values in the city are above $1 million.
Oliver Hartwich, executive director of business think-tank the New Zealand Initiative, wrote in the survey's foreword there was only one single driver of housing unaffordability.
"Demographia's reports and countless other surveys and studies do not leave the slightest doubt that unaffordable housing is almost everywhere and every time caused by the same factor: housing supply restrictions.
"The more restrictive the market, the more prices will increase over time."
Mr Smith says fixes are needed in the short-term to help out people struggling right now.
"Banks have now made it harder for first-home owners to get on the ladder, now saying they need a deposit of 40 percent. They're stuck in the rental market. There's others that need to get into the rental market, but can't. The whole continuum needs to be looked at."
Dr Hartwich says the growing gap between homeowners and renters is creating "social polarisation".
"Especially at a time when there is a growing threat of populism to Western democracies, there is a social imperative for making housing more affordable."
New Zealand as a whole is rated severely unaffordable, with houses costing 5.9 times the median. Historically, anything above 3.0 has been considered unaffordable.
The world's least affordable major housing markets
- Hong Kong (houses cost 10 times the median household income)
- Sydney, 12.2
- Vancouver, 11.8
- Auckland, 10
- San Jose, 9.6
- Melbourne, 9.5
- Honolulu, 9.4
- Los Angeles, 9.3
- San Francisco, 9.2
- Bournemouth & Dorsett, 8.9
Least affordable areas in New Zealand
- Auckland (houses cost 10 times the median household income)
- Tauranga/Western Bay of Plenty - 9.7
- Hamilton, 6.2
- Christchurch, 5.9
- Wellington, 5.8
- Napier-Hastings, 5.7
- Dunedin, 5.4
- Palmerston North/Manawatu, 4.7