Tasmania home to Australia's most affordable housing, report finds

For the price of one house in Sydney you could buy three in Tasmania, according to the state's Real Estate Institute (REI).

Despite recent concerns about the increasing cost of houses, Tasmania has consolidated its position as Australia's most affordable state for housing.

The latest Affordability Report, released by the Housing Industry Association (HIA), showed mortgage repayments compared to earnings made it more affordable to buy a house in Tasmania.

"Based on the typical size of mortgage repayments relative to earnings, home purchase in Tasmania remains much more affordable than in the seven other states," executive director Rick Sassin said.

"The purchase of a median-priced dwelling in Tasmania absorbs 23.8 per cent of average earnings, well below the 30 per cent threshold which is considered manageable from an affordability perspective."

Affordability in Hobart improved by 1.2 per cent during the December 2016 quarter and is Australia's most affordable capital city.

Tony Collidge from the Real Estate Institute of Tasmania has welcomed the findings.

"[While] a lot of the community yells out and says 'we'd like it to be cheaper', we're more than $100,000 away from our closest competitor at the moment, that being Adelaide," he said.

"You're looking at Sydney and Melbourne where Sydney now the median price is over $1 million and Melbourne's very quickly approaching $850,000 to $900,000.

"You look at Tassie at $365,000 being the median price, there is a significant difference there."

Mr Collidge said Tasmania was a great place to invest.

"You take a house in any area, you could multiply that by three, buy three of them [compared] to Sydney, you could buy two of them [compared] to Melbourne."

The HIA said the __news was a boost for the local economy.

"The housing market does make a substantial contribution to that internal sustainability of our economy so it's good to see housing flourish," Mr Sassin said.

"There have been some comments about the fact that house price growth [is] limiting people in the Tassie market, affordability has been an issue and this is further to reinforce that affordability is there, we are still the most affordable state in the nation."

What can you buy under $1m?

For comparison, in Sydney's CBD about $800,000 will buy you a "large", 64-square metre, one-bedroom, one-bathroom apartment.

In Melbourne, you can get two bedrooms and 88 square metres of floor space.

But in Hobart, that can buy you 253 square metres of floor space with four bedrooms, two bathrooms, a garden, in-ground pool and a spectacular water view on a quarter-acre block.

And you can still walk to work.