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House prices are overvalued not undervalued, claims investment bank

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Australian Broker | 14 Jul 2015, 05:06 AM Agree 0
Forget claims that Australian house prices are undervalued, a leading investment bank has come out and claimed that Aussie house prices are significantly overvalued
  • Patrick | 14 Jul 2015, 08:48 AM Agree 0
    If Pre-GFC means 2007 that is 8 years ago. A 50% increase in 8 years is just 5.2% per annum, so about 2 to 3% real. This seems perfectly normal to me.
  • Interest | 14 Jul 2015, 10:01 AM Agree 0
    Patrick, a 5.2% annual increase on already overvalued prices shows the problem, not a perfectly normal situation. It's worth looking at a longer time scale, or comparing to income and other factors like the article discusses, as opposed to applying high school maths over an ideal time frame to suit your argument.
  • Patrick | 14 Jul 2015, 10:58 AM Agree 0
    My point is that uninformed journalists quote numbers like 50% increase because in isolation that number sounds big, which suits their agenda. I bought a 2 bedroom 1 bathroom unit in Dee Why in 1972 for $22,000. Similar properties in that suburb now sell for $500 to $600K a 2000% increase. But this is just an average 7.5% to 8.0% per annum over 43 years and I bet you would find this is about 2% to 3% real for the same period as it included the high inflation 70's & 80's. Housing is market determined, if they were unaffordable the prices would fall, this is inevitable. The moaning always comes from those who expect a free ride through life.
  • Robert | 15 Jul 2015, 09:27 AM Agree 0
    When did we start listening to what Kieran Davies says. It hasn't stoppped him from buying a large amount of properties.
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