Oceania is a very diverse continent, with poor countries, developing countries and developed countries. Therefore, this means that the real estate market is very different between Oceanian countries, for example, the real estate market in Australia is completely different from the one in Solomon Island.
There are many people from other continents, who are thinking to buy properties in Oceanian continent for investments purpose or other purpose. Buying an apartment in Oceania is not a simple process and it is important to take in consideration the most important objective and subjective factors during the decision-making. In addition, it is necessary to analyse the real estate market, before buying an apartment in Oceania.
In this work we are going to analyse the real estate market in the Oceanian continent and to find in which countries the market is overvalued and in which is undervalued.
If we consider the price to income ratio, the most expensive country is New Zealand, where are necessary 8.3 years to buy an apartment. Australia is in the second place with 7.6 years. For the other Oceanian countries, there is no information about this index.
If we consider price to rent ratio of the city centre, the real estate market is overvalued in Australia and New Zealand, so in these countries is better to rent than to buy an apartment. For the other Oceanian countries, there is no information about this index.
If we consider price to rent ratio outside the city centre, the real estate market is overvalued in Australia and New Zealand, so in these countries is better to rent than to buy an apartment. For the other Oceanian countries, there is no information about this index.
If we consider the mortgage as percentage of income, the most expensive country is New Zealand, where the mortgage payment is about 65.2% of the incomes. Australia is in the second place with 57.4%. For the other Oceanian countries, there is no information about this index.
In Oceanian continent, there are many occasions to purchase an apartment at discount price when the real estate market is overvalued, but at the same it is necessary to be careful, because there are also many apartments at expensive price despite the real estate market is undervalued.
About the data used in this work
Real estate market analysis is made considering an apartment of 90 square meters which price per square meter is the average of price in the city centre and outside of city centre. The indicators used are:
- Price to income ratio. It is calculated by dividing apartment price to median familial disposable income for a year. Lower value is better.
- Price to rent ratio. It is calculated by dividing the apartment price to the received rent income or the estimated rent that would be paid if renting. Lower values suggest that it is better to buy rather than rent, and higher values suggest that it is better to rent rather than buy.
- Mortgage as percentage of income. It is calculated by dividing the monthly cost of the mortgage to take-home family income. Lower value is better.
The data used in this work are provided by Numbeo and are relating to 2019.