The main problem is that sellers ask more money, that their property costs. It is almost 40 percent overvalued.
Usually, their target is young buyers who prefer to pay the money that was asked. In other hand, sellers don’t really have much choice. They blame the whole property market that may be crashed pretty soon.
It is not just Australian problem. Specialists have noticed that the prices on the property quickly raised in twenty countries from twenty-six that were checked. The same problem as Sydney has Vancouver, San Francisco, and even Shanghai.
Over the past three years, the cities that were named above raised the property prices on 12 percent every year.
It is not comparable to the average income in these countries.
Economists compared the prices for rent with the prices for the houses. It turns out, that all property in Canada, Australia, and Britain is overvalued.
Dr. Shane Oliver, the chief economist claims that the Australian property was overvalued during decades. All the sellers and buyers waited for the crash of prices but it has not come.
Shane admits that they worried about overvalued prices since 2012 year, but the prices rose with each year.
He afraid that there is a big risk for bankruptcy, as far, as expensive houses became mixed with high debt ratios.
He does not know if everything will be all right. However, if something will go not as they hoped, the property market will be one of the most vulnerable sectors of the economy.