The nation's housing market, particularly in Sydney and Melbourne, is at risk of "renewed overheating", the International Monetary Fund has warned, urging governments to overhaul property taxes including negative gearing.
The IMF said actual house prices in Australia were 7 per cent above a debt-service-to-income ratio of 25 per cent, which is considered a reasonable level of debt.While house prices had eased between mid-2017 and mid-2019, there were now signs of a substantial lift, particularly inand Melbourne where the median is more than $800,000. The IMF said the debt-to-income ratio in both cites was about 40 per cent, making it much more difficult for people to buy a house.
The IMF said a "renewed overheating" of the housing market was an increasing risk, particularly given low interest rates. Since the report was compiled, official interest rates have been cut to aAccording to the IMF, the Australian Prudential Regulation Authority should expand and improve its macro-prudential rules if the housing market takes off. This could include tougher loan-to-valuation ratios or forcing banks to reduce their mortgage exposures in particular parts of the country.
I hope people listen to the IMF
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