The Economist says that Australia’s housing market is overvalued by more than 25 per cent.
The magazine named Australia along with the UK and Canada as being ‘notable’ for having an overvalued housing market. The metrics it uses include home-value-to-rent ratios and prices relative to after-tax income. House prices compared to rents are 60 per cent overvalued. Compared with income prices are 39 per cent too high.
Make sure that if you are buying property in Australia, that you ensure you get comparable sales and get some due diligence completed before putting in offers, as you don’t want to buy a house that is massively overvalued.
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