The Great Australian Dream could remain just a dream with house prices moving from being affordable to severely unaffordable in the last 10 years. According to an AMP.NATSEM Income and Wealth Report, it will take at least another decade of flat house prices coupled with income growth for houses to regain an affordable status.

The report found median house prices grew 147 percent to $417,000 while median after-tax incomes only increased 50 percent to $57,000 from 2001 to 2011, pushing the price to income ratio from an affordable 4.7 to a severely unaffordable 7.3 today.

In 2001, more than 50 percent of all suburbs in Australia's five major capital cities were affordable but today only four percent are affordable and not one of these affordable suburbs is in inner city areas.

Sydney is the most expensive place to buy a house with a median price of $510,000, while Hobart is the cheapest with a median price of $326,000.

Sydney is also the least affordable capital city in Australia, with a typical home costing 8.4 times the average Sydney household income. Darwin is the most affordable with houses at six times the median income.

The decline in housing affordability is not confined to the capital cities. Non-capital city (regional) areas in four out of Australia's seven states and territories have experienced the greatest rate of house price growth.

As a result, all non-capital city areas are now unaffordable. Regional NSW is the most unaffordable with house prices at 7.9 times the median income.

AMP Financial Services Managing Director Craig Meller said households that are in housing stress are devoting a large portion of their after-tax income to housing costs.

"Buying a home and paying off the mortgage is putting Australians under considerable stress. It can be a struggle to get into the market and when people do, many have little funds left over for essentials, let alone a family holiday," Meller said.

"But Australians have not been deterred, with many entering the property market or preparing to do so every day. Some are downsizing or saving for longer, others are making sacrifices. In doing so, people are looking to secure their financial futures by holding tight to the Australian dream - to be a home owner."

NATSEM lead author of the report, Principal Research Fellow Ben Phillips said that unaffordable housing has become an Australia-wide issue.

"It's no longer just capital cities that are facing affordability issues. Affordability levels in Wollongong, Newcastle, Mandurah and the Gold and Sunshine Coast are now on par with major capital cities," Mr Phillips said.