Post by Banjo on Mar 4, 2011 15:20:32 GMT 7
Australian home prices the world's most overvalued
HOME prices in Australia are the most overvalued in the world, a leading global report said today, intensifying a growing debate in the country on the possibility of a housing bubble.
The report, published in The Economist magazine, comes as Australia's housing market continues to face stiff criticism both domestically and overseas.
"There may be good reasons for Australian prices to have risen so far, but people made similar, and ultimately incorrect, arguments for the run-up in prices in the West," author of the property special in The Economist, Andrew Palmer, said in a statement.
Several recent data reports have shown growth in housing prices is either starting to slow or turn negative.
International investors and even the International Monetary Fund have recently argued the local housing market is overvalued.
As prices have dipped, some economists and investors -- most notably GMO chief investment strategist Jeremy Grantham -- have even argued recently that a housing bubble is being created in Australia.
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Still, local economists and even the country's central bank have dismissed claims there is a property bubble, noting there has never been a "credit-fuelled speculative boom" in Australian prices.
In the report, The Economist noted the ratio of house prices to rents in Australia is 56 per cent above its long-run average between 1975 and 2010.
The second most overvalued house prices in the world were in Hong Kong, at 54 per cent above historical average, it said.
www.theaustralian.com.au/business/markets/australian-homes-prices-the-worlds-most-overvalued-the-economist/story-e6frg926-1226015956075
HOME prices in Australia are the most overvalued in the world, a leading global report said today, intensifying a growing debate in the country on the possibility of a housing bubble.
The report, published in The Economist magazine, comes as Australia's housing market continues to face stiff criticism both domestically and overseas.
"There may be good reasons for Australian prices to have risen so far, but people made similar, and ultimately incorrect, arguments for the run-up in prices in the West," author of the property special in The Economist, Andrew Palmer, said in a statement.
Several recent data reports have shown growth in housing prices is either starting to slow or turn negative.
International investors and even the International Monetary Fund have recently argued the local housing market is overvalued.
As prices have dipped, some economists and investors -- most notably GMO chief investment strategist Jeremy Grantham -- have even argued recently that a housing bubble is being created in Australia.
Start of sidebar. Skip to end of sidebar.
End of sidebar. Return to start of sidebar.
Still, local economists and even the country's central bank have dismissed claims there is a property bubble, noting there has never been a "credit-fuelled speculative boom" in Australian prices.
In the report, The Economist noted the ratio of house prices to rents in Australia is 56 per cent above its long-run average between 1975 and 2010.
The second most overvalued house prices in the world were in Hong Kong, at 54 per cent above historical average, it said.
www.theaustralian.com.au/business/markets/australian-homes-prices-the-worlds-most-overvalued-the-economist/story-e6frg926-1226015956075
