PHOTO: Australian property. FILE

It has been puzzling if not paradoxical to see Australian national house prices surging at a time when wages are not growing and when most people’s bottomline is not any better than the pre-covid 2018-2019 period when prices were  actually falling.

Yes, it is rather tragicomic that the world’s most sparsely populated nation has one of, if not the most expensive housing and land on the planet. As a result, most Australians are forced to spend the best part of their life to pay the banks, rent forever, or live an undeserving life of homelessness and indignity.  Well, our leaders, or lack thereof are to blame, but this is another topic and definitely next time.

If you really thought the global pandemic that has put the world on its knees would finally deliver an era of affordable housing in Australia, you were wrong – dead wrong.  Despite initial hopes the housing market could drop by 30 per cent during the pandemic – perhaps, the only positive side of the pandemic, many home buyers suddenly woke up to booming prices.  Home prices in Australia are now at an all-time high.

Sometimes the simplest questions are the hardest to answer. Like this one: When will the housing market come to its senses?

To be able to safely say home prices will stabilise at a sensible level, we have to substantiate why the current property prices are artificially inflated, driven by the speculative mania and don’t actually reflect the real economic fundamentals (it would mean the price level and growth rate are unreasonable and unsustainable).