"Australian House Prices Rise More Than Twice Wages Over 20 Years"

[Asia Economy Reporter Yujin Cho] A recent study revealed that Australian house prices have more than doubled compared to wages over the past 20 years.

According to Bloomberg News on the 18th (local time), the nationwide housing price index in Australia, released by real estate data firm CoreLogic, rose 193.1% from September 2001 to this September over the 20-year period.

During the same period, the Wage Price Index (WPI) calculated by the company increased by 81.7%, which is less than half the rise of the housing price index. In particular, the housing price index increased by 22% over the recent 13 months since the COVID-19 pandemic, marking the largest increase ever.

CoreLogic reported that the amount equivalent to 20% of the median Australian house price rose by 25,417 Australian dollars (approximately 22 million KRW) up to October this year, reaching 137,268 Australian dollars (about 120 million KRW).

Bloomberg explained, "While house prices surged sharply, wage growth was relatively slow, making it more difficult to save the minimum deposit required to buy a home."

CoreLogic analyzed that this 20-year upward trend in house prices has led to an increase in household debt.

In fact, Australia's household debt-to-income ratio (DTI) is among the highest in developed countries, making Australian homeowners vulnerable to rapid interest rate hikes.

Australian house prices have risen mainly in major cities such as Sydney and Melbourne due to increased demand for residential real estate amid the low interest rate environment over the past three years and the spread of remote work caused by COVID-19.

Furthermore, CoreLogic forecasted that wage growth will be a key factor in the future housing market outlook. Eliza Owen, a researcher at CoreLogic who conducted the analysis, explained, "Because wage and price fluctuations affect the benchmark interest rate, which determines mortgage rates."

She noted that while wage increases and intensified inflation could reduce the burden of existing housing debt, the higher interest rates have increased repayment amounts, thereby placing a burden on Australian homeowners.

This content was produced with the assistance of AI translation services.