Apparently Australian property is over valued...so how do we stack up globally?

Most of you are hearing a range of people talk about Australian house prices being overvalued. To be honest, it is very hard to find reliable information to prove or disprove this theory. However, one report has just arrived that is very interesting.

One of the arguments put up by the "dooms-sayers" is that debt levels in Australia are unsustainable and that mortgage stress is at an all time high. This is highly simplistic as it does not take into account........

• Rising real wages,
• Low unemployment,
• Population growth
• Consistently low inflation and
• Conservative lending policies.

In world terms, Australian borrowers do not appear to be under any greater mortgage stress than most of our international counterparts. This is some achievement given our interest rates are high in comparison.

The attached link is to a report commissioned by the worlds biggest mortgage insurance company, Genworth Financial. Most of our financial institutions in Australia use Genworth to insure their loans. As this group operates in so many countries, they have access to unique and reliable data from across the globe. Specifically, this report compares mortgage data from: India, USA, UK, Australia, Italy, Mexico, Canada and Ireland.

Here are some of the highlights:

• 22% of respondents across eight countries struggled to meet their mortgage repayments over the past year
• 1/3 of all respondents felt positive about their national economy, with developing countries particularly optimistic
• 45% of all Australian homebuyers surveyed overpay their mortgage – the second highest across all countries surveyed
• One in five first homebuyers in the US, Canada, and Australia were already spending more than half their income on debt repayments
• 3/4 were concerned about their personal finances, with 46% of Italian respondents and 63% of Irish respondents the most concerned across all countries
• The average age of first homebuyers has been increasing in all countries except India
• 84% of Australians surveyed cited rising costs of living as the primary concern impacting their ability to repay their mortgages over the next 12 months.

The report is very interesting and gives a great world perspective, click here to view the full report...