Houses in Sydney, Melbourne, Wollongong, and other parts of Australia are now pricier to buy than a house in New York.
No Names Beating Big Names
The booming real estate in the Land Down Under was highlighted in a recent global property report by Deutsche Bank. It pointed out that house prices in Australia and Canada have beaten those in the US and the UK in the last decade. Gains in the usual housing hot spots, including New York and London, were beaten by the lesser-known names such as Wollongong, Darwin, and Winnipeg.
The bank said homes in Canada are the most expensive, being 63% overvalued. Australia, meanwhile, ranked fourth, with house prices being 49% overvalued compared to average prices.
The seaside city of Wollongong in New South Wales, in particular, was said to have homes that are being sold with prices higher than in New York. The percentages are based on figures when the average house price was compared to the average household income.
The Deutsche Bank survey compares home values to the locale’s historic multiples of household income and rent.
Bad for One, Good for Another
While this may seem like trouble for home buyers, property investors see this as an opportunity that can boost other real estate in the countries.
The professionals at ResortBrokers.com.au say that tourism and other properties will prove to be better options for investors. While everyone is focusing on houses, other investment properties such as motels and hotels will be more attractive.
These real estate options may cost a little, but industry experts returns to be quick, especially as tourism and migration are increasing in Australia. Many investment property hot spots are predicted to be in or near the tourism destinations, such as Queensland.
While house prices are currently at high levels, experts see this will normalise in the following months, as the Australian dollar performs stronger and mortgages continue to drop. Property investments will see a productive year, especially with Chinese and other foreigners wanting their share of Australian property.