It's more affordable to buy a house in London than in Tauranga, a new study shows.

Tauranga is now New Zealand's most unaffordable city, out-ranking Auckland where residents can expect to fork out 8.8 times their annual household income to buy a home.



Demographia's 14th International Housing and Affordability Survey showed Auckland was slightly more affordable than it had been in previous years, moving from the world's fourth most unaffordable city to the ninth on a list of 92 major centres.



Tauranga is not classed as a major city in the data, so is not ranked on that list.



But in a more comprehensive data set included in the study, Tauranga, where residents must spend 8.9 times their annual household income to purchase a house, beats out Auckland.



READ MORE:

* Staggering divide between super-rich and rest of us in property markets

* Bank forecasts four year house price drift

* Housing: do like the Germans do

The study used Stats NZ 2017 household income data to calculate the average household income in each city.

It comes after the Real Estate Institute of New Zealand said since December, Auckland's monthly adjusted median house price had gone down 1.1 per cent to $870,000.

MATT SHAND/STUFF Tauranga, in the Bay of Plenty, is now New Zealand's most unaffordable city.

The next most unaffordable New Zealand place to buy a house was Hamilton-Waikato (6.5 times annual income required), followed by Napier-Hastings (6.1), Wellington (5.5), Dunedin and Christchurch (both 5.4), and Palmerston North/Manawatu (4.5).

The New Zealand median was slightly higher than Wellington, at 5.8.

Hong Kong tops the housing unaffordability leaderboard, with buyers requiring the equivalent of 19.4 times their combined median household income to buy a home.

SIMON MAUDE/FAIRFAX NZ Auckland, where residents must save for 8.8 years on average to buy a home, is ranked as more unaffordable than London with 8.5.

Sydney is the next most unaffordable city, with 12.9.

Rochester, New York is the most affordable place to buy in the world, with households needing roughly 2.5 times their annual income to pay off a house.

Demographia is owned by US conservative commentator Wendell Cox who is a strong advocate for reducing urban planning regulation and curtailing public transport investment.

The report in part blames urban containment policies for restricting housing supply and pushing up prices.

"There is an emerging understanding that more new housing supply is required to address housing affordability," it claims.

"Urban containment severely limits or even prohibits building the low-cost housing tracts that have contributed so much to rising home ownership rates and greater affluence since World War II," the report said.