Australian Housing Market Essay

According to Bank for International Settlements (BIS), Australian Bureau of Statistic (ABS) and national sources, sizeable drops in national house prices were a describing feature of the financial crisis, predominantly in those countries which practiced the sharpest growth in household debt pre-crisis. However, Australia is an exemption. Even through Australia had experienced the strongest and toughest pre-crisis property booms, also the highest ranks of household liabilities, house prices have constant to develop higher over the past two years.
Overvalued of Australian residential market The first issue presented in property market in Australia is overvalued of residential market. One standard that has received a lot of press lately is the house-price-to-rent ratio. The price-to-rent ratio is well-recognized economic principle used for real estate valuation and usually used to calculate as the ratio of home

Sydney has the most expensive housing in the country while Tasmania has the cheapest housing in Australia. Economist estimated that Australia’s housing market is severely overvalued. . According to the 2016 Global Real Estate Bubble Index published by investment bank UBS, Sydney’s housing market now grades in the bubble risk category and tops all other cities in the region.
Housing affordability continues to deteriorate Housing affordability measures the financial outcome for a household of renting or purchasing the dwelling they need or wish to occupy (“Housing Affordability in Australia”, 2006). Housing affordability problems in Australia persevere due to real housing costs have raise over time and because of a decrease in the supply of housing stock at the low-cost end of the private rental