Australia’s property market is one of the most over-valued in the world according to a report from Deutsche Bank Global Markets Research.
The report was undertaken in conjunction with the Organisation of Economic Co-operation and Development (OECD) and said Australian houses are overvalued by 44 per cent.
To correct the property prices may weaken household’s financial health however.
The OECD puts countries into five groups according to whether their property is overvalued, undervalued, correctly valued and whether or not prices are rising or falling.
Australia finds itself in the fifth group in the report, where our house prices are falling and overvalued. Other countries in this group are the UK, Spain, Belgium, Denmark, Finland and Holland.
These mostly European countries are recovering from a recent housing market crisis. Commonwealth countries were found to have the most overvalued property, with New Zealand house prices being reported as 70 per cent over value.
Japan, having seen property in decline over a long term of around 25 years, recorded the cheapest property market in the OECD.