Great quote from the Deputy Governor of the RBA:
"The second issue is that of house prices. People feel that house prices in Australia are quite high, and that’s quite often because the ratio of house prices to income that are published for Australia tend to focus mainly on prices in the cities, and they are quite elevated. But, if you look across the whole country, the ratio of house prices to income is not that different from most other countries...
Well, the house prices in cities aren’t high relative to the income in the cities because most of the figures you see published on house prices to income – what they do is they measure house prices in the city and express it as a proportion of income of the whole country. But, if you do house prices relative to the incomes of the people living in those areas, then the prices in the cities also are quite reasonable. But, as to the demographics as to where people end up living, I mean I can’t really sort of say much about that. But, clearly, there’s a lot of forces working there. Some work to pull people into the cities but there’s also forces that encourage people to move out into other parts of the country. So I’m not clear – it’s not clear to me where the balance will lie."
