Australian homes overvalued by 38% on average, analysis shows
AMP analysis shows homes exceed historical rent ratios by at least a quarter in every capital, with Brisbane at 61% overvalued.
AMP chief economist Shane Oliver has analysed Australian homes against average rents over 40 years and found them overvalued in every capital. Brisbane leads at 61% above fair value.
Sydney is at 41%, Perth at 28%, and Melbourne at 24%. Oliver compares this to stock market price-to-earnings ratios.
The analysis does not predict a 38% crash. Media have used similar analyses for decades to call crashes that never happened.
AMP forecasts a 10% fall from peak to trough. But ANZ predicts deeper drops for Sydney and Melbourne.
- 38 per cent
- Average overvaluation across capitals
- 61 per cent
- Brisbane overvaluation
- 40 years of rent data
- Analysis time period
- 10 per cent
- AMP forecast peak-to-trough fall
Why it mattersHomeowners and buyers need to understand whether their purchases are overpriced. The analysis suggests more downward pressure is possible.
AustraliaMost Australian property owners face potential further losses if prices correct. First-home buyers may find better entry points if prices fall further.
✓ Claims checked against the source. checked 2 d ago
