Are Australian houses overpriced?

A former economist at the Reserve Bank of Australia has expressed concern over the increase in house prices, stating that house prices in the country are overpriced by as much as 30%.

Jeremy Lawson was a senior economist for the RBA and currently works for Standard Life. He points out several factors that will negatively impact households in the future, as household debt to income ratio reaches unsustainable levels. He is mostly concerned about the Chinese growth slowdown, where majority of investments on the country depend on, making households vulnerable in case the interest rate increases. Current household debt is growing more than twice than wages.

The RBA has downplayed these issues, stating that credit growth is at a sustainable level. The annual housing credit growth of the country sits at 6%.

Read more about this on the Property Observer website.