Australian Property News
Overvalued Australian cities
Posted on Wednesday, March 17 2010 at 4:12 PM
Sydney and Brisbane are believed to be the most overvalued cities in Australia, according to the results of a PRDnationwide survey.
Some 28 per cent of the 1200 property investors who were polled said Sydney house prices were the most overvalued while 26 per cent said Brisbane homes were above a fair market price.
Darwin was rated the third most overvalued, with 13 per cent of respondents putting it in that category, followed by Perth at 12 per cent and Melbourne at 11 per cent.
Canberra, Hobart and Adelaide were each considered overvalued by three per cent of property investors surveyed.
"Basically what this research is saying is that your average buyer feels you get less bang for your buck in Brisbane and Sydney compared to other cities," says PRDnationwide research director Aaron Maskrey.
"We've certainly seen house prices fall during the period of economic instability – but many investors believe prices still appear too high in some cities."
Maskrey says supply and demand in Australia suggests there will continue to be pressure on house prices.
He says the survey shows that some cities are in a housing bubble in which prices bear no reflection of underlying economics.
"Prices in the Brisbane LGA (local government area) have increased by 11.7 per cent per annum in the past 10 years," he says.
"Wages on the other hand have increased by a lot less – 4.5 per cent per annum."
"There will come a time when people won’t be prepared to pay these prices in their home town and will look to invest in other states."
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