Over-priced properties crowd out investment in the innovation economy.
Australian property prices are globally and artificially high, and offer low-value for home owners. The U.S. / U.K. correction did not happen in Australian cities, with many Australian homes offering lower value than central hubs such as Paris, London and Boston.
This article was written by Chris Zappone, Business Day reporter (previously of CNN). 2thinknow analysis & comment on impacts of property prices on innovation is featured in the Article.
Christopher Hire, Executive Director, 2thinknow provided some comment in the article, on the impact of property prices on the innovation economy — both in an Australian and global context.
Some added comment, from the personal web site of Christopher:
The interesting measure of property prices is multiple of income. There’s a lot of pain out there in inner-city and suburban Australia, and we’re all feeling it. The stats the government produces are aggregate stats, which averages out those doing uber-well (often blue collar semi-skilled trades, or specialist white collar) and those not doing so well (some white-collar or unskilled).
In a market economy the problem is central statistics rarely tell the whole story.
But anything above a multiple of 5 times the average wage (most like Demographia use 3 to 4 as unaffordable) is a seriously expensive property. Anyway, the danger is in ‘one size fits all’ national analysis.
2thinknow measure cities worldwide for affordability, including property prices. The innovation economy requires an ideal range of property pricing, for continual economic (and social) development.
Australian cities in 2011 are among the lowest benchmarked cities globally.
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