Zooming housing costs in Australia have made it one of the world’s least affordable countries in the world. According to Demographia’s annual survey of property markets that covered eight countries including Hong Kong, housing costs in Australia are 5.6 times the median household income.

It said Australia is second to Hong Kong in terms of the huge house prices. The report found Sydney as the second least affordable city in the world after Hong Kong. The current house prices in Sudney are several times more than the annual income of a typical middle class household.

In the report, Australia’s five major metropolitan areas have been studied for 12 consecutive years. The results are described as “severely unaffordable.”  It noted Sydney’s double-digit annual property price growth as most glaring. Sydney’s house price-to-income ratio had the biggest annual increase, according to the survey, reports Radio Australia.

A typical Sydney house costs more than AU$1 million, which is about 12.2 times the annual income of a typical household in the city. In 2014, Sydney’s unaffordability quotient was 9.8. With its soaring prices, Sydney has edged out Vancouver as the least affordable housing market in 2016 after Hong Kong. It was observed that the exorbitant house prices in Australian cities are wiping out the prospects of middle and low income groups from becoming homeowners.

In Demographia’s calculus, the house price-to-household income ratio at 5.1 or more will be deemed “severely unaffordable” while 4.1 to 5 is “seriously unaffordable.” If the ratio stays at 3 or less, it will be an “affordable” scenario. The study also said that there are only two affordable towns in Australia. They are in the mining-rich Western Australia.

The report carries an introduction by Senator Bob Day from South Australia. The report’s authors have flayed zoning restrictions and other building regulations as the reasons of escalating house prices.

“It is important to remember that the ‘scarcity’ that drove up land prices is wholly contrived – it is a matter of political choice, not geographic reality,” Day wrote.

Meanwhile, a bearish view is prevailing over Australia’s housing sector in 2016. This was stated by Alex Joiner and Alexandra Veroude, both are economists at Bank of America Merrill Lynch. Calling the outlook as “the coming residential bust” they noted “the residential construction cycle peaked at unprecedented levels, the question now becomes how quickly it declines.”

According to a report in the Business Insider, the year 2016 will see “peak housing” and “by the end of the year, the cycle will likely be receding and detracting from growth and employment.”