Sydney is now the third most expensive city in the WORLD despite plummeting property prices – and Melbourne isn't far behind
- Sydney is ranked with the third least affordable housing followed by Melbourne
- The city was ranked second for seven years and was replaced by Vancouver
- Major cities Adelaide, Brisbane and Perth also made it into the top 20 rankings
Sydney has been ranked the third most expensive city in the world followed by Melbourne.
The harbour city was ousted by Vancouver, Canada, after it held second spot for seven years on a global list of more than 300 cities.
A property price slump is behind the slip down to third place, according to a housing affordability survey by urban consultancy firm Demographia.
Sydney (pictured) has slipped from the second most expensive city in the world to third place
Melbourne (pictured) took out the fourth place followed by Californian cities San Jose and Los Angeles
Australia's five major housing markets are severely unaffordable, the Demographia report revealed.
Major Australian capitals Adelaide, Brisbane and Perth also made it in the top 20 least affordable cities, taking the 13th, 17th and 20th spots respectively.
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The report referenced an OECD publication that states housing prices in Australia have doubled since the early 2000s and that household debt has surged.
Prices fell notably in in Melbourne in Sydney in 2017, the OECD publication stated.
'Even so, housing affordability remains severely unaffordable in all of the major markets,' the report wrote.
'Despite what has been called the largest Sydney price reduction in 35 years, house prices relative to incomes are more than double the rate of the early 1980s.'
Sydney is Australia's least affordable market, with a Median Multiple of 11.7.
This means the buyer must earn nearly 12 times the average Australian's income to afford the average price of an Australian home.
Hong Kong, which has been ranked first for nine years, and Vancouver both have major land supply problems making them the least affordable cities.
Melbourne took out the fourth place followed by Californian cities San Jose and Los Angeles.
Major Australian capitals Adelaide, Brisbane and Perth also made it in the top 20 least affordable cities, taking the 13th, 17th and 20th spots respectively.
Hong Kong, China (pictured) has been ranked the most expensive city for the past nine years
Vancouver, Canada has been ranked the second least affordable city after Sydney held the spot for seven years
Housing in Australia's major cities were considered unaffordable due to the gap between prices and incomes.
The Sunshine Coast in Queensland was less affordable than every other Australian capital apart from Sydney and Melbourne, according to a separate ranking for towns and cities with a population under one million.
The separate ranking put the Sunshine Coast in 11th place, Gold Coast in the 14th and Geelong in 22nd place.
Regional areas such as Ballarat, Cairns and the Fraser Coast were revealed to have more expensive housing than New York.
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