Australia: Most Expensive Place to Live

Prime Minister John Howard has failed to accept a new report showing Australia is the most expensive country in the world in which to buy a home.

US-based research group Demographia found buying a home in Australia was more expensive than in any other country when adjusted to median household incomes.

The report also found that four Australian cities – Sydney, Melbourne, Hobart and Adelaide – were among the world’s top-10 most expensive cities based on median house prices when compared with median household income, The Age newspaper said.

But Mr. Howard said while he hadn’t seen the report, he questioned its findings.

“I find it hard to believe that our real estate would be quite as (expensive),” he told Southern Cross radio.

Mr. Howard said there were offsets to people spending more on their homes in Australia compared with other countries.

“The Americans have a different capital gains tax regime and of course they have death duties in America and we don’t have those in Australia,” he said.

“So there are some swings and roundabouts that are sometimes not taken into account when these comparisons are made.”

But the Australian Council of Social Service (ACOSS) spokeswoman Sue Ham told ABC that even with relatively low interest rate, Australia’s house prices are still very much not affordable for homebuyers.

“Despite the fact that interest rates have risen and the housing market has cooled slightly, we can’t see any change in making it more affordable for people to get into housing,” she said.

The Governor of the Reserve Bank of Australia said earlier this month that he still thinks Sydney property prices are far too high and is concerned about young people owning their first home.

“It’s so expensive that particularly for a lot of young people, it’s in their interests to go elsewhere, where their lifestyle is more affordable and for older people, a lot of them I think are cashing out. Sydney is still extraordinarily expensive,” he said.

Some information for this report was provided by AAP.