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Sydney too costly for young: RBA chief

Sydney is such an "extraordinarily" expensive place to live that the nation's top banker believes young people should think about leaving the city.

Reserve Bank of Australia (RBA) governor Ian Macfarlane said talk about house prices retreating masked the fact that Sydney was still way more expensive than anywhere else in the country.

"In dollar terms, Sydney is still way, way more expensive than anywhere else in Australia, and in fact I think it's so expensive that, particularly for a lot of young people, it's in their interests to go elsewhere, where the lifestyle is more affordable," he said.

Mr. Macfarlane said there had been significant net emigration from NSW over the past three to four years.

"Recently we've heard so much about house prices retreating in NSW, more so than other states," he said.

"It would give you the impression that somehow or other the imbalance has gone away and that Sydney is no longer so expensive relative to the rest of the country."

Addressing a parliamentary committee, Mr. Macfarlane said Sydney house prices were somewhere between 50 and 60 per cent more expensive than in Melbourne.

"Despite all the increase in house prices in Melbourne and despite all the increase in house prices in Brisbane, Sydney is still extraordinarily expensive," he said.

"And that's why I have to say I get a little impatient when I hear the real estate industry in NSW saying 'Oh, what we've got to do is get house prices going up again' - that somehow or other that's going to save NSW.

"That's Sydney's problem, it's not its solution."