Australia's property market among the most 'misaligned' in the developed world
Property prices in Australia may be up to 50 per cent higher than what the average household can afford, according to a global housing analysis.
A new report by the International Monetary Fund (IMF) has found Australia's market is among the most misaligned in the developed world.
It claims the average Australian household would need to spend more than 40 per cent of its disposable income to afford a median-priced house.
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Property prices in Australia may be up to 50 per cent higher than what the average household can afford, according to a global housing analysis. Natalie Boog
That is a due to a combination of higher prices and sharp increases in interest rates.
With interest rates expected to climb higher next year, the report suggests the market is at risk of a sizable fall in prices.
During the pandemic, when interest rates were at record lows, median house prices soared more than 30 per cent across the country.
The report also notes Australia's rental market is the second worst in the Asia Pacific region behind New Zealand.
The IMF claims that governments and central banks need to consider a range of policies to address housing affordability, including the construction of social housing and tax system reforms.
The federal government is planning to establish a $10 billion fund to provide social and affordable homes.
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