IMF warns ‘misaligned’ Australian housing market at risk of ‘sizeable’ crash

New International Monetary Fund data reveals property prices in Australia are as much as 50 per cent above what an average household can afford.

As interest rates rise, there are fears the market is heading for a crash.

Senior economics correspondent for The Age, Shane Wright, says the maths doesn’t add up.

Press PLAY below to hear why the situation is concerning

“Australians just love pushing up the price of housing and we’ve been doing it at an exceptional rate,” he told Jimmy Bartel and Emily Power, filling in for Ross and Russel.

“In terms of our incomes, the prices of our homes are among the most expensive in the developed world, which is amazingly weird given we are a single continent with about 26 million people.

“It’s now amplified because we’ve got a record level of debt and now we’ve got interest rates going up quite sharply and we haven’t been in this situation where we’ve put rates up so much when our level of indebtedness was so high.”