Are Australian houses and units overvalued? Are they overpriced?
Gerard Minack (MS): Australian houses are much more overvalued than US houses; indeed on some measures, our houses are arguably the most expensive in the world. They’re also less affordable. Rod Cornish (MQB): Given the jump in mortgage interest rates and the deterioration in affordability, particularly in Brisbane, Adelaide and Melbourne, our house-price models point to some wider weakness and some price falls over the next 12 months (not just in Sydney), although not to the levels suggested by simplistic historic rations. The degree to which valuations are overstretched is most pronounced in outer regions and markets that experienced exceptionally strong growth last year. Michael Blythe (CBA): There is a general perception that Australian house prices are overcooked. It stems largely from a comparison of house prices relative to rents or wages. And on that basis, the ratios are out of kilter with historical norms. But what those calculations ignore is that there has been a significan
