Homes overpriced by up to 50 per cent
Morgan Stanley's equity strategist, Gerard Minack said house prices are a bubble that has raised the level of risk in the economy. Mr Minack argued measures of value – such as house prices compared with rental returns or household disposable income – suggested they were overvalued by 35 to 50 per cent.
The property boom has been especially pronounced in Melbourne, where the median house price has nearly doubled this decade. Sydney prices have risen more modestly, including a slump after 2004 before a surge last year. RP Data figures showed a slight fall in June after 17 months in a row of increases.
Source: Sydney Morning Herald