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Australian property severely overpriced

Australian property severely overpriced

by Simon Parker 3 comments

Staff Reporter

Homes in Australia remain among the most unaffordable in the developed world.

According to a new report by Demographia, the nation's houses are “vastly overpriced”.

Of the 39 housing markets analysed within Australia, all were rated as “seriously” or “severely” unaffordable, based on median house price to annual household income ratios of more than four times.

According to the report, anything below an average house price to average pre-tax income ratio of three times is regarded as “unaffordable”.

“Overwhelming economic evidence indicates that urban containment policies, especially urban growth boundaries, raise the price of housing relative to income," the report claimed. "This inevitably leads to a reduced standard of living and increased poverty rates, because the unnecessarily higher costs of housing leave households with less discretionary income to spend on other goods and services,” the report read.

“The higher costs ripple into rental markets, tightening the budgets of lower income households [which] already suffer from lower discretionary incomes.”

Agents in at least one area the report labelled severely unaffordable, however, dismissed its claims.

Barry Booth from First National in Coffs Harbour, on NSW's mid north coast, told The Coffs Coast Advocate that the survey's result was "absolute bulls...".

"Is Coffs Harbour real estate expensive? - no," Mr Booth told the newspaper. "Lots of properties here sell for below replacement cost and local housing represents great value for money.

"Of course you can't argue with simple statistics, but this finding is clearly skewed by the low incomes of the high number of retirees and welfare recipients who live here."

Christine Clarke from Raine and Horne also told The Coffs Coast Advocate that she didn't agree with the report's findings. She told the newspaper that boosting housing affordability was more to do with growing incomes than cutting house prices.

"We need to grow our economic base and strengthen our tourism industry to create more, and better paid, jobs," Ms Clarke said.

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