Is it safe to buy property in Australia again?

Property investors in Australia look like they'll have some relief by the end of 2019, as the nation's property downturn (which has failed to have a run-off effect in New Zealand) ends.

New statistics from Moody's Analytics has forecasted that property will increase in value across Australia in every major city except Hobart through 2020.

This seemingly provides a small recovery for those who have lost money on their investments during the last 12 months or so as Australian house prices have been corrected. 2019 overall will still bring a -9.6 per cent fall in house prices in Sydney (and -10.8 per cent in Melbourne).

But there's a catch. Growth isn't forecast to deliver real gains. In Sydney and Melbourne in 2020, prices are only set to go up 3.1 and 1.3 per cent each.

As such, Financial Review reports that it's still not time to buy residential property in Australia. Even though the re-elected Liberal government has done away with negative gearing and any talk of changing the capital gains discount rate, there are still plenty of warning signs that investing in Australian property is a bad idea.

Australia's ratio of household debt is still the second highest in the world (only behind Switzerland). It's at 120 per cent, while the average in developed countries across the world is only 72 per cent. For contrast, during the pre financial crisis property in the USA circa 2007, the household debt was at 99 per cent – still lower than what Australia has now.

This means if you're trying to get back on the Australian property market bandwagon from New Zealand – wondering if now is a good time as the pundits of the market start waving their flags and saying everything is OK again – you should think more carefully.

Just because house prices in Australia have decreased, that doesn't mean they are good value investments. Especially with the amount of debt the country is holding on to.