NSW's staggeringly high house prices are forcing teachers, nurses, police and emergency workers to abandon Sydney, with many struggling to even pay rent in the city, a new report has found.
The University of Sydney report, released on Monday, found in the 10 years between 2006 and 2016, Sydney lost close to 20 per cent of key workers to outer and regional areas in the Illawarra, Southern Highlands and Hunter Valley.
Key workers can't afford to buy a home in Sydney's inner-city suburbs while a nurse with five years experience who earns about $57,000 can only afford to buy a home in Cessnock, about 100km from Sydney, the Key Worker Housing Affordability report found.
Wyong, Port Stephens, Lake Macquarie, Maitland and Cessnock are the towns closest to Sydney that the city's 156,000 key workers can afford.
Many teachers are even struggling to afford a suitable rental property in Sydney, NSW Teachers Federation general secretary John Dixon says.
Teachers are share housing in sub-standard properties or leaving the city, meaning schools in the affluent east and north may soon struggle to fill critical casual and temporary positions, he warned.
"Many teachers are just living in cupboards," Mr Dixon told AAP on Monday.
The report found Parramatta in Sydney's west experienced the largest loss of key workers while the Shoalhaven, Southern Highlands, the Hunter Valley and Illawarra all had an increase in key workers moving to the area.
The report found a single key worker eyeing a $1 million property in Sydney in 2016 would need 13 years to save a deposit - compared with 8.4 years in 2006.
One of the city's nurse educators, who asked to only be identified as Sarah, was told by a mortgage broker she had been priced out of the city entirely and is unable to upgrade from her cramped, dilapidated apartment.
"It's put a dampener on my whole life, all I do now is work and come home," she told AAP.
Teachers Mutual Bank, which commissioned the report, said any cooling off in Sydney's housing market has not trickled down to a price range that key workers can afford.
Several urgent solutions are being suggested to ensure Sydney doesn't lose more key workers including a key worker housing target for the NSW government and policies to reduce construction costs.
St Vincent de Paul chief executive officer Jack de Groot says Sydney has called for a minimum affordable housing target as high as 30 per cent on government-owned land.
"Without these changes, the city we know and love will become nothing more than a haven for the rich," he said in a statement.
A spokesman for NSW Housing Minister Anthony Roberts said the government was increasing affordable housing supply and making it easier for first home buyers to enter the market.
"The government is currently conducting a broad review of state policies, including housing-related policies, to improve their effectiveness," the spokesman said in a statement.
Labor leader Luke Foley said Ms Berejiklian had broken her pledge to fix housing affordability in the state.
"Workers tell me that they would love to live among the communities they serve which is not an unreasonable expectation," he said in a statement.