A house in Melbourne is a good bet for a sale, with the average price for a home in Australia set to reach $1.2 million in July, according to real estate website Zillow.
It comes as real estate market experts warn the country is at risk of overheating, a major concern ahead of the Federal Government’s planned $7.5 billion infrastructure package.
The average price of a home will hit $1 million by July 20, 2018, according Zillows.
Advertisement The report comes as the Federal government prepares to release the next federal budget.
The report says Australia’s housing market is in a “critical” period with a “sharp and rapid increase in demand” for houses.
It said the current housing market, which has been built over the past decade with a huge infusion of capital, was set to “collapse” at the end of this financial year, as demand for homes outstrips supply.
“The current housing supply is in crisis, with a sharp and rapid rise in demand for houses, which will push prices beyond the current peak of around $1m,” the report said.
“The most immediate and critical challenge is affordability.”
While Australia is still relatively affordable for many, affordability is an issue for many Australians, the report found.
In Sydney, the average property is priced at $1,934, while Melbourne has a median price of $1 in Sydney, $1 and $2 in Melbourne respectively.
And, while many homes are being bought by people in the middle class, many others are being sold by “low-income earners”, with the median income of a Sydney household falling to $25,000.
Real estate agent David Kavanagh said the lack of demand for housing was “the worst problem facing the housing market in Australia”.
“We’re seeing a sharp, rapid increase [in demand] and a lot of it is coming from the middle and upper middle classes,” he said.
“They are going to need to move out of the city.”
“If we don’t act now, we could be seeing the same thing happen in a short time,” Mr Kavanah warned.
According to the report, Australia’s property market is currently facing an “extremely negative trend”.
“Australia’s housing stock has been in a serious oversupply condition for several years,” it said.
It cited recent developments in Australia’s capital city of Sydney, which have seen a shortage of houses for sale and have seen demand rise.
However, there are also indications the city is becoming more affordable, with home prices rising in parts of the state.
But the report warned the current situation will only worsen.
There are only a handful of properties in the country with a price tag above $2.2m, and many more that are still below that threshold, meaning the current supply is still below demand.
At $1-2 million, Sydney has a population of around 22.3 million people, and has a home price of just over $1 billion.
More to come.
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