Friday, March 11, 2011

SMH Confirms Housing 41% to 49% Overpriced

SMH Confirms Housing 41% to 49% Overpriced

Tucked away in a story about Noosa house price crashing. 

The Sydney Morning Herald lets slip that they believe house prices in Australia are 
41% & 49% OVERPRICED!!
See Link:

Now have a look at some of the points the Jurno Adam Schwab raises!!!

Below are the key aspects they let slip. Showing what they really think.

"In 1994 the average annual wage in Australia was $28,080. 
By 2010, it had risen to $50,824. That is a very healthy increase of 80 per cent."

"If people spent the same proportion of their income on their home in 2010
as they did in 1994, that would have resulted in an 80 per cent increase in house prices"

"In 1994, the median property price was $148,800, 
while in 2010, RP Data found the median was about $450,000. 
That is an increase of more than 200 per cent."

"Had property prices increased at the same level as wages, 
the median house price in Australia would be about $267,000 - 
41 per cent below what they are."

"By contrast, had house prices simply tracked the consumer price index, 
using 1994 as a base, house prices should be $230,640 - 
or about 49 per cent lower than at present."

"While housing bulls will point to a shortage of property or rising incomes, 
the real reason for house price increases is far more nefarious. 
Since 1994, the ratio of housing debt to housing assets has risen 
from 15.8 per cent to 28.7 per cent. "

"Unsurprisingly, rental amounts have increased at a relatively similar level to household earnings. 
As a result, net yields on housing in capital cities have slumped to about 2 per cent -
far lower than the return one can receive in the bank."

So there you go I have been saying this for over a year know &
now the SMH has now confirmed it!
But what is of greater interest is that Newspapers are now all starting to reduce the Hype about property & starting to report things as they really are!!

Dont forget to Post a link to this story on chat pages etc to get the word out:


  1. The bubble just keeps inflating. I read on that buying is better than renting but it's not fair that all these crazy people are overpaying for run down dogboxes in Australia when housing is so much cheaper everywhere else in the world. We have the most unfair and expensive house prices on the entire planet and these rises just keep on pricing me out! I've been promising my family for years that we'll get on the ladder but our nasty landlord keeps jacking up the rent and it's so hard for us to save up the deposit. All very unfair really. AndersB.

  2. 12 months ago there was complete denial that real estate was in trouble, but now the realization is beginning to dawn on many that something terribly serious is about to occur in Australia. Australian housing is vastly, dramatically overpriced, by all reasonable measures. The recent analysis by The Economist is right on the money, and anyone will see from the excellent blogs just how overvalued Australian housing really is:

    The bigger the boom, the bigger the bust, and the property boom that began in Australia in the nineties evolved into the greatest real estate bubble known to mankind. The bust that's coming will be a doozy. As 2011 unfolds the spruikers will come to understand that real estate in Australia is dead for generations. During the next two years we can expect to see vacancy rates and inventory levels surge to unprecedented levels as house prices collapse by up to 40 or 50% in most parts of Australia. This might sound extreme, over the top. But how over the top were the 200% to 300% rises in house prices we saw over the past decades. A 50% fall is nothing in the scheme of things, it just brings prices back to a fair level. The bubble is dead. Long live the new new paradigm, where an average family can finally afford a decent home in Australia. It's been a long time coming, but soon it will be time for the bears to party. Bring it on!

    Australian Property Forum