Housing shortage makes Australian home prices almost twice the price of USA

A shortage of 200,000 dwellings is helping fuel Australian home prices, which are 82% higher than in the US, and disproving investors and property experts who say they will fall 42% as interest rates rise in one of the world’s priciest home markets.

“It will take years to turn the shortage around,” said Matthew Bell, an economist at Australian Property Monitors. “When it comes down to it, that’s fundamentally what’s going to drive the market.”

Australia’s median home price was 6.8 times the gross yearly income last year, compared with 5.1 times in the UK and 2.9 times in the US, according to the annual Demographia International Housing Affordability Survey.

The nation of 22 million people has six of the 10 most unaffordable cities among the US, UK, Canada, Ireland, New Zealand and Australia, the survey showed.