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House prices 'not as overheated as many think'

Property prices in Australia are far more sustainable than many believe.

The price of buying a house in Australia is far more affordable and sustainable than many people believe, a new report published this week by Moody's Analytics has stated.

There have previously been fears that the property market is headed towards a bubble, but the company's stress test said that the prices achieved in most areas are largely fair.

In the tests, which looked at a number of different factors for each state specifically, it was found that each of NSW, Queensland, the ACT, Tasmania and the Northern Territory were home to properties that were largely priced fairly.

Analysis included inflation rates, household income and interest levels and researchers said that issues with previous reports mostly come from the fact that they were nationwide rather than state-specific.

“This suggests that state-specific housing policies could be beneficial, particularly when the market is overheated," Moody’s Analytics senior economist Glenn Levine said.

The research also found that income-to-price ratio for houses has increased steadily in the nation since 1980, which is indicative of a healthy property market.

Posted by Ravin Chatlani

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