IT has been increasingly obvious Sydney housing affordability was deteriorating based on the number of years’ worth of income required to purchase a home.

The significant gap also exists between incomes and the cost of renting. The situation is particularly dire for single-income households.

Professor David Adamson of the University of South Wales noted in the recent Housing Affordability Income Gap report that the geography of housing unaffordability was increasingly hurting middle-income families.

The report noted dwelling prices have shown modest declines over the year with Sydney leading the way, down 4.5 per cent.

“It would be a mistake however for policy makers to take this as a sign that no action is required,” the report concluded, noting for Australian housing to meet any accepted definition of affordability, prices would have to fall by 60 per cent.

It conceded any major fall in prices could spark a deep and painful economic recession.

Historically rents have been more closely pegged to incomes than property prices, but this link appears to be weakening.

Adamson suggests we have a broken housing system as between 2006 and 2016, Sydney median rents have increased by 76 per cent while incomes have increased by 51 per cent. “The analysis tells us that this isn’t simply an experience of the few but that occupations often seen as middle-class and well-paid are increasingly experiencing housing stress in order to live close to their place of work.”

The report concluded typical households face the choice between living a considerable distance from the city, or living in a one-bedroom apartment. If neither option was practical, these households are effectively forced to accept living in housing stress.

Avoiding stress on a two-bedroom apartment in Sydney’s inner suburbs required a $121,000 income.

The report notes the median Sydney rent is $530 a week which would secure a three-bedroom house at Blacktown, but not enough for a two-bedroom unit at Burwood.

The report found two-bedroom units in Sydney’s middle ring are mostly affordable, but income gaps exist in the Canada Bay, Hunters Hill, Ku-ring-gai and Willoughby LGAs. Sydney’s outer ring is affordable for renting, although stress comes with detached dwellings in Hornsby, the northern beaches, Sutherland Shire and The Hills.

Since June 2000, regions in Sydney’s west, Blacktown and Fairfield, have experienced rent increases of 125 per cent and 145 per cent respectively, compared with 87 per cent in Mosman, and 94 per cent in Woollahra.

The effect is pronounced too in Sydney satellite cities including Newcastle, where rents are up 150 per cent, and Wollongong with rents up by 168 per cent, despite lower incomes. The report acknowledged the 30-year boom in house prices has made a lot of people extremely wealthy, “at least on paper”.

It then suggests that wealth factor was “perhaps why so many have been willing to turn a blind eye to the economic and social fallout for so long”. It slammed policy makers for “aiding this wilful blindness by using cheap credit and immigration to create the illusion of an economy running on all cylinders”.