Why Australian house prices are cheap

The latest data from the McKinsey Global Institute should quell fears of a looming property crunch.

Summary: Australian property remains cheap compared to other nations despite comparatively high urban concentration, data provided by the McKinsey Global Institute shows. In fact, while debt is already high in Australia, international experience tells us there is no reason why it can’t push higher, particularly when three quarters of our household debt is being held by top income earners.

Key take-out: As always, detached housing is a better investment than in units, particularly in Sydney where there is no sign of a pick-up in construction. If you’re nervous about Sydney and Melbourne, there are good opportunities elsewhere.

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