A new report has claimed Australia’s housing is some of the most overvalued in the world.
The Australian property market has often been painted as overvalued by overseas observers, and the Swiss-based Bank for International Settlements (BIS) has continued the trend, the ABC has reported. The BIS has claimed Australia’s housing market is second worldwide in price-to-income ratios and equal fourth in price-to-rent ratios.
Australian house prices were 50% higher than usual compared to rents, and 40% higher compared to incomes. The reports authors claimed a price correction could be seen in the future. This could particularly be the case in markets such as Australia’s where wage growth has not kept pace with inflation, the report claimed.
"This might lead to a reversal or moderation of recent growth or a further sliding of prices," the report said.