General Overview of Australian House Market
One has only to listen to the news for a few days to realize that the housing market has spiraled upwards in recent months. But Australia is not the only country to have experienced this phenomenon. In Ireland and Spain both, housing prices have gone through the roof with no serious explanation offered by experts.
It’s not only the lowest income earners that are being affected; middle-income earners in Australia are now also struggling with the cost of a housing to income ratio that is 50% higher than other countries. In fact something like 1.7 million people are now suffering from ‘housing stress’ according to the Australian Institute of Health and Welfare. What this means is that their accommodation is costing them more than 30% of their income.
Since a bust usually follows a boom, experts are more than a little worried that the constant increase in interest rates will lead to an unwelcome - and large - economic downturn, the effects of which would be protracted. We will just have to cross our fingers and hope that the Reserve Bank gets their economic math right, so that the present boom can be slowed and lowered a little without any dramatic side-effects.