You can purchase a $1 million house in the US, but you won’t be able to buy a house until the country starts recovering from the Great Recession.
Key points:The average house price in Australia is now $1.7 millionUS house prices have fallen by around 10% since 2013This means Australia is the most expensive country in the world for people to buy property, even after the country is on track to record the largest monthly house price increase in historyIn a speech to the Federal Reserve, Reserve chair Janet Yellen said Australians were “deeply troubled” by the recent drop in the price of house.
“Australia is the world’s most expensive property market and a recent study by UBS found that median house prices in Australia had fallen by $1,7 million between June and August 2017,” she said.
“This is especially troubling given the global economic downturn, and the growing importance of the housing market for Australia’s growth.”
Australia’s median house price dropped by $2.6 million over the same period, falling to $1million in September, according to data from the Australian Bureau of Statistics.
“It’s important to recognise that Australian house prices are still very high, but the current economic conditions in Australia and the global downturn have had a large impact on the country’s housing market,” Ms Yellen added.
“House prices have been particularly vulnerable to market swings due to the ongoing downturn in the global economy, which is why we are concerned about the strength of the Australian housing market.”
Australian economist Simon Hickey said the US has the lowest median house market in the OECD.
“The median house in New York, the top-selling city, is $1m, while in Sydney it’s $1 billion,” he said.
In the US the average house sold for $1-1.5 million in September and is now up to $2 million.
“So, we’re looking at an increase of around 10 percent since last year,” Mr Hickey told ABC Radio.
“In fact, in the same week we sold a record number of homes, we sold around 8.8 million homes.”
And that’s still the most houses sold in the history of New York City, the city with the most house sales.
“What’s driving the boom?
Australia’s economy has been slowing for a number of years, with the median annual growth rate dropping from 4.2 percent in 2012 to 3.7 percent in 2015.”
That’s not good, that’s not sustainable,” Mr Meehan said.
He said the current economy has not been able to support the rise in house prices.”
I think that’s been one of the major factors that’s kept Australian house values down and in some cases even out of reach for most Australians,” he added.