news

Property prices 10pc too high

By webmaster

The International Monetary Fund has warned that Australian house prices might be overvalued by as much as 10 per cent.

According to the IMF’s latest research, What Drives House Prices in Australia? A Cross-Country Approach, cyclical factors such as low interest rates, the commodities boom and disposable income levels have all contributed to inflated house prices, but their over-valuation appeared milder than in the past.

Price-to-income ratios - the proportion of income spent on housing costs - was high, above 10-year averages by about 20 per cent at the end of June, the fund's working paper said.

However, this over-valuation was similar to ratios appearing in New Zealand and Canada.

But while overvalued prices suggest some adjustment might be required, the IMF said high house values could be balanced by incomes and rents growing faster than house prices, migration and changes in terms of trade.

''Thus, a decline in house prices is only one way for the adjustment to occur, and the correction required in prices can occur gradually,'' it said.

That said, the IMF still warned authorities to “remain vigilant” to emerging risks given that household debt is relatively high at over 150 per cent of household disposable income.

Thank you.

Your enquiry has been sent to a local Aussie Mortgage Broker.

We will be in contact with you shortly.
Opps.

error occurred.
Unfortunately Aussie cannot attend to your home loan related enquiry at this stage as you must be a citizen or permanent resident.
Do you need help finding the right loan for your investment?
What Aussie do for you:
  • Give expert mortgage advice to help you find great investment loan deals
  • Help you maximise return by lowering financing costs
  • Save you time and effort by helping with the paperwork
First name
Last name
Location
Mobile Number
Are you an Australian Resident?
promoted stories

Top Suburbs

Highest annual price growth - click a suburb below to view full profile data:
1.
BLUE BAY 49.18%
2.
PAMBULA 43.5%
3.
BERKELEY VALE 42.74%
4.
POINT PIPER 40.52%
5.
NORTH TURRAMURRA 38.12%
Property prices 10pc too high
SPI logo