The sizes of backyards around homes in Australia's cities are getting smaller, as affordability and location become buyers' new priorities.

RP Data analysed the average sizes of backyards around houses on less than one hectare across the country and, based on 2008 transactions, found that Sydney had by far the smallest - at 136m2 - followed by Melbourne at 190m2. In those cities particularly, land supply is extremely tight as the population continues to rise and there's little new development happening.

"As densification in inner-city areas increases due to strong demand and population growing, it is anticipated that competition for available houses will intensify as opportunities to buy one in these areas become fewer," said Cameron Kusher, senior research analyst for RP Data.

The trend would also push up prices in these areas, he said.

"It's a simple demand-versus-supply equation as demand for these properties is strong - and will remain so - and supply is constrained and likely to become tighter," he added.

Most of the others in the top 20 smallest average sizes of backyards were in suburbs of Sydney and Melbourne.

The biggest backyards were in Tiaro, Queensland, with an average of 5,530m2, followed by two other places in the same state - Woocoo and Laidley - at 4,992m2 and 4,270m2 respectively.

Tasmania also featured prominently on the list, as it had the overall largest average size of backyard for any state in 2008 at 1,171m2, according to RP Data - nearly double that of New South Wales at 662m2.