You are not permitted to download, save or email this image. Visit image gallery to purchase the image.
The 16th annual Demographia International Housing Affordability Survey, released yesterday, rated all eight markets in New Zealand as "severely unaffordable".
Dunedin ranked fifth of the eight with a median house price of 6.9 times the median household income of $68,000.
It overtook Wellington (6.8), Palmerston North (6) and Christchurch (5.4).
The report also showed unaffordability grew in the city since last year’s report, when the average price was 6.1 times the median wage.
Tauranga-Western Bay of Plenty was the least affordable, costing 9.3 times the local median wage, followed by Auckland (8.6), Napier-Hastings (7.4) and Hamilton (7).
Dunedin Salvation Army community ministries manager David McKenzie said pressure started building about two and a-half years ago.
"That’s when we started to see pressure on rents, people being evicted because landlords are selling," he said.
The Salvation Army ran a transitional housing service in Dunedin, which usually provided accommodation for about 20 people at any given time, he said.
"You see it when people turn up at your door and say, ‘I’ve been looking for housing, I can’t afford what’s there, I’m at the end of my tether’.
"We see these stories every day."
The news also followed the release of CoreLogic figures earlier this month that showed house prices in Dunedin had soared past those in Christchurch.
The city’s house prices rose 18% over the past year, significantly outperforming other major centres.
Dunedin’s median property value rose to $514,680, an 8.7% rise from the previous quarter.
Demographia survey co-author Hugh Pavletich said there was no doubt housing affordability was getting worse.
"This survey is a huge wake-up call, basically, for all involved at central and local government.
"The whole situation has moved from a crisis to a disaster."
Mr Pavletich said high house prices were "a threat to the middle class".
That was a problem for everyone because the middle class included teachers, nurses, firefighters, police officers and social workers.
"It's a massive social problem."
Meanwhile, the number of people on the waiting list for state housing has more than doubled in the past two years to just under 14,000.
The Government has budgeted more than $2 billion this financial year for rent subsidies and emergency housing grants. — Additional reporting RNZ