Australian housing market set for correction and possible bust, new report warns

Australia’s housing market is hurtling headlong into a correction which could burst the property bubble.카지노사이트

That’s according to a new report from the International Monetary Fund (IMF), released earlier this month.

The research found that Australia has one of the most “misaligned” housing markets in the world, and is among the most unaffordable.

This year, Australian housing prices rose 50 per cent above what the median household can afford, according to the report, as real wages declined because of inflation.

Now the average family is spending 40 per cent of what they make to keep a roof over their heads.

The IMF warned that developed housing markets around the world, including in Australia, could be headed for a correction after the unprecedented gains of 2021, with signs already on the way of values declining.

This could bring the possibility of a “bust”, where the housing market might crash.

“While episodes of housing price corrections played out historically in many different shapes and degrees of severity, the more pronounced episodes — ‘housing busts’— have been associated with severe economic recessions in most cases,” the report stated, noting that the world was in danger of one such economic recession.

If such a thing were to happen, this would have “severe repercussions” on the average person because typically “the main source” of people’s wealth and debts lie with their property, as it could see prices plunge 30 per cent.

Australia and Japan were named and shamed in the Asia-Pacific region as having the two worst “overburden rates” — where the share of the population spending more than 40 per cent of its income on housing was higher than the OECD average.

Australia’s housing market was also specifically shamed alongside New Zealand, Canada and Hong Kong as being the most “misaligned” in the world where the ratio of income to house prices and rent was skewed.

The IMF also stated that Australia was the most misaligned in the Asia-Pacific region, with New Zealand a close second.바카라사이트

“Our model-based analysis shows that a high magnitude of price misalignment, when combined with the impacts of high policy rates, can lead to a sizeable price correction, nearly comparable to past episodes of housing busts,” the paper warned.

At another point in the report, it pointed to past research which found that housing prices fell by nearly 30 per cent in a bust when the bubble burst.

In 2021, New Zealand enjoyed the largest property gains, at 35 per cent nationally.

As a result, its central bank has brought up the cash rate by 400 percentage points since September last year in what many say is a warning sign for the rest of the world.

For the last two quarters, New Zealand house prices have recorded a significant drop.

Similarly, Australia’s market rose 25 per cent during the “acute phase” of the pandemic last year and since then has been on the decline, especially amid eight back to back interest rate rises.

NAB predicted that Australian house prices will suffer an overall drop of nearly 23 per cent in 2023.온라인카지노

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