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Movement of Australia to 4th ov...

Movement of Australia to 4th overvalued property market criticised

Michael Matusik has criticised Australia's rating as fourth most overvalued property market by the Economist.

The movement of Australia to fourth in the list of most overvalued global property has been criticised by one real estate expert.

Michael Matusik, founder of Matusik Property Insights, wrote in the Property Observer that the findings of The Economist magazine's 2013 global housing index that the findings were "debatable".

According to the study, on a personal income affordability measure, Australian property is 24 per cent overvalued - fourth behind France (34 per cent), the Netherlands (33 per cent) and Canada (32 per cent). On a rents measure, Australia is third behind Hong Kong and Singapore.

Mr Matusik commented: "Most economists struggle forecasting things like actual economic growth and interest rates let alone property markets. Generally speaking, economists have a pretty poor understanding of the real dynamics and influences of property markets."

He explained that to get a real picture of any real estate market, it is important to go in at ground level, conversing with people involved on a day-to-day basis.

Nevertheless, prices are still relatively high in Australia, with the average cost per square metre standing at $8,717, according to the Global Property Guide.

Posted by Steve Douglas

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