The Australian housing market is at its peak and could crash if the country’s central bank makes any rash change to interest rates, according to researchers at the Swiss bank UBS.
CNBC reports that following a multi-year boom, Australia has seen residential property prices grow at 10.2 percent year on year in the 2017 March quarter. Housing starts fell 19 percent in the year’s first quarter and home-buying sentiment is at its lowest since the 2008 financial crisis. The cost of an average home in the country is currently 669,700 Australian dollars ($532,000).
"Despite weaker activity, house prices just keep booming with still strong growth of 10% year over year in June. However, this is unsustainably 4-5 times faster than income,” UBS Economist George Tharenou said. “Looking ahead, we still see price growth slowing to 7% year over year in 2017 and 0-3% in 2018, amid record supply & poor affordability.”