Tougher lending restrictions and a more agile construction industry is being credited for Australia's notoriously expensive housing market being more affordable than New Zealand's.
The annual Demographia International Housing Affordability released yesterday shows all of New Zealand's main centres are now either seriously or severely unaffordable, with the median price 6.5 times the median household income.
The study still considers Australia as severely unaffordable, but overall the market is slightly cheaper than New Zealand's, with median prices 5.9 times the median household income.
The property analysts CoreLogic said property values in Sydney and Melbourne have fallen since their peaks in 2017, and most other markets in Australia are losing momentum.
The company's head of research, Tim Lawless, said normally Australia's housing cycles are dictated by interest rates or an economic shock, but this had been influenced by credit availability.
He said the Australian Prudential Regulation Authority had limited investor credit growth and put a speed limit on interest only mortgages.
"Debt levels in Australian households were absolutely at record highs and we weren't seeing enough households really starting to try to drill down that level of debt which I think was the main catalyst to bring in some of these reforms."
Mr Lawless said the price drop was also a natural consequence of people simply not being able to afford to buy a house, so demand has fallen.
"Without a doubt we were seeing more and more buyers simply unable to enter the housing market because they couldn't afford to get their foot in the door."
Australia has also been moving through the peak of an unprecedented building boom Mr Lawless said, particularly for high-rise apartments.
He said one of the big differences in the two markets is that the supply response in Australia had been very adequate, which hasn't been the same for New Zealand.
He said there appeared to be a bottleneck in this country's ability to deliver on new housing.
"Despite the fact that consents have been quite strong, getting commencements and products started in the marketplace seems to be where the bottleneck is."
Mr Lawless said Australia's banking sector had also been through a Royal Commission which has meant the banks have really tightened up on their lending criteria, scrutinising peoples' expenses and their ability to pay off their debt.
His New Zealand counterpart for CoreLogic, Nick Goodall, said it had been easier for New Zealanders to borrow, which has meant more people could get into houses, driving up prices.
"The availability of credit has obviously contributed to the amount of price growth we've seen over the last five, six, seven years."
He said low interest rates has also meant people could get access to money and borrow large sums with not as much income.