A view shows the city skyline from Westhaven in Auckland, in this October 23, 2011 file picture.
A view shows the city skyline from Westhaven in Auckland, in this October 23, 2011 file picture. Reuters/Jacky Naegelen

The rising house prices in Auckland, New Zealand has led to its inclusion in the list of top cities with unaffordable houses. The new report shows Auckland houses have become more expensive than homes in Los Angeles.

According to the 11th annual Demographia International Housing Affordability Survey, Auckland is ninth in the rankings of the least affordable major cities in the world. Out of the 378 cities included in the survey, Auckland was described as "severely unaffordable" in 11 annual surveys so far, Stuff.co reported.

The international survey compared cities based on house prices to income. Cities with average house prices that were there times more or less than the average income were classified as affordable.

Laurence Murphy, professor of property at the University of Auckland, said New Zealand does not have a problem with affordability but with "choice." He explained that it was the choice of top income earners, or those who get $500,000 a year, to buy a house worth $2 million. He said middle income families across the country have the financial capacity to buy lower end housing while poor families cannot afford it.

Murphy believes there were multiple factors driving house prices up as the survey had taken a "very simplistic" approach. Although New Zealand house prices are high, planning was not the only reason for its unaffordability. The professor suggested that New Zealanders will have to change the way they think about home ownership if they want more affordable housing.

He said New Zealand has a system that allows lending, and Kiwis can borrow money to buy a house not only for accommodation but also as a form of retirement fund. Murphy added that if New Zealanders only see their house as a means to make money, housing would be expensive. He suggested looking for alternatives like renting apartments even for families who earn more. However, the alternatives do not have the same investment value as homes.

Meanwhile, one of the authors of the report said Auckland's house prices have gotten worse. Christchurch researcher Hugh Pavletich revealed that the city's housing problem has "become dramatically worse" in the last two years, Radio NZ reported. He believes Auckland is in a housing crisis and blames government officials for not addressing the issue fast enough.

Australia's Sydney and Melbourne cities ranked third and sixth place, respectively, in the major cities' list of least affordable housing. China was named the top metropolitan city with the most expensive housing, according to Demographia.