Less than 1 per cent of houses and apartments built in Sydney over the past eight years have been “affordable” dwellings targeted at those on low-to-medium incomes, a situation researchers have described as a major missed opportunity.

The lack of affordable dwellings – either for rent or purchase – delivered in Sydney contrasts with more significant measures adopted by expensive cities like London and San Francisco, and even in cities without the same housing pressures, such as Adelaide.

“We’ve been under the illusion that just producing more houses is going to reduce prices to the extent that we can overcome that deposit gap faced by moderate income first-home buyers,” said the University of Sydney's Nicole Gurran, the lead researcher on a new study by the Australian Housing and Urban Research Institute.

Affordable housing units in Ultimo, one of the few schemes to have created units in Sydney.

“That’s just not the case. We've got to do something different and the planning system can play a role.”