Future thinking should be shared. With that in mind our team publishes insights weekly to help keep you in the (k)now.


Hewison Private Wealth - Insights
Hewison Insights
The International Monetary Fund (IMF)

Are Australian property prices expensive?

Nathan Lear
Partner/Private Client Adviser
16 Jun 2014

The International Monetary Fund (IMF) released a report last week showing Australian homes are among the most expensive in the world when comparing prices to household incomes and rents. A comparison of 24 developed countries showed Australian house prices are among the most expensive in the world, with Australia ranking third on the list behind Belgium and Canada.   

As a financial adviser, I am often asked whether Australian property prices are expensive. I find this a difficult question to answer: like any investment, it’s hard to make broad sweeping comments on such a large sector.

The Australian property market is large with many different pockets. For example, the performance of property in Melbourne has been significantly different to that of Brisbane. Breaking it down even further, what type of property is it? It could be residential, commercial or industrial – each type of property has different characteristics and performance metrics.

Even within the same sector, there can be variations in price and performance. For example, the value of a residential property in Brighton may have performed completely differently to one on the outskirts of Melbourne. It’s like trying to compare the performance of Telstra and Commonwealth Bank on the Australian sharemarket – completely different companies.

Generally speaking, Australian property prices have performed exceptionally well over the past decade, in particular Melbourne residential property. It is no longer as easy to find a bargain as it may have been in the past. If you are considering purchasing a property, be aware that prices are historically high on several measures. However, this is not to say – with the right advice and by doing some careful research – you can’t purchase quality property in the current market.

The key to successful investing is to own quality assets across the major assets classes. This includes property, Australian shares, fixed interest, international shares and cash. I would caution anyone from investing heavily into only one asset class, in particular the Melbourne residential property market.

If you are considering purchasing a property in the Australian market, consult a financial adviser first. 


Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.auPlease note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.