The latest survey of global house prices conducted by the Economist magazine, show Australia has the most overvalued housing of the 20 countries it surveyed in the world.
According to the Economist, Australia’s housing bubble is now overvalued by 63.2 percent, having ballooned another 18.4 percent in the past year. Behind Australia is Hong Kong at 58.1 percent overvalued, and Spain 47.6 percent.
The Economist writes :
Our analysis of “fair value” in housing, which is based on comparing the current ratio of house prices to rents with its long-run average, suggests that China has less to worry about than the likes of Australia, which is again the most overvalued of the markets we track. That makes it all the more surprising that Australia’s central bank opted not to increase its benchmark interest rate this month.
On Tuesday, China raised interest rates by a quarter of a percent to help cool the countries property market. This rise is the first in three years.
http://www.nicholsoncartoons.com.au 25th Sep 2002
» Global house prices : Floor to ceiling – The Economist, October 21st 2010.
Posted in Australian economy, Australian Housing, China Housing | 26 Comments »