The question is how do we know Sydney’s property is overpriced, particularly when compared to other leading global cities?
One way to make a judgement on this is to consider average income against property prices. For example, Australia came in third by this measure on a recent global list from the International Monetary Fund (IMF), behind only Belgium and Canada.
This report concluded that house prices, rent on property and household incomes should move in line with each other over the long term and that, based on historical averages, Australia’s home pricing is well above the average.
Earlier in the year, Australia was also called out for having a higher property prices to wages ratio by the Organisation for Economic Co-operation and Development (OECD). The study rated property prices versus rents and overall annual property price growth, and wrapped it up into a single score.
It’s fair to assume that the biggest contributor to the national score was Sydney, as well as Melbourne and Perth, based on long term property price growth in those cities.
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