Much has been made this week of the claim by the Bank for International Settlements that local house prices may be seriously overvalued

Much has been made this week of the claim by the Bank for International Settlements that local house prices may be seriously overvalued. As seen in the chart below, this is based on the view that the current house price-to-income ratio and house price-to-rent ratios are around 40% and 50% respectively above their long-run average. These estimates also seem relatively high by global standards. Yet Federal Treasurer Joe Hockey is right to claim this is lazy analysis. Click the link for more: (VIEW LINK)


David Bassanese
Chief Economist
Betashares

Author, columnist, investment strategist and macro-economist. Previous roles at Federal Treasury, OECD, Macquarie Bank and AFR. I develop economic insights and portfolio construction strategies for BetaShares' retail and adviser clients.

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