The global market selloff has a silver lining for Australian stocks, as the highest yielding developed market globally is no longer too expensive, Goldman Sachs said.
"Following the underperformance of Australia relative to global markets and its continued growth in dividends, Australia has now moved back to a position where it no longer looks overvalued on the basis of yield," Goldman said in a note.
(Read more: 2014 a 'litmus test' for Australia economy: Goldman)
After global bond yields hit their nadir in mid-2013, yield-chasing reached extreme levels, pushing Australia's high-dividend payers up to the point where the market looked as much as 20 percent over-valued, the bank said.
In May, when the 10-year U.S. Treasury yield was near its 1.7 percent low, the average Australian index stock with a 5-6 percent yield traded at 15.4 times earnings, around 15 percent above the international average, while stocks with dividend yields of more than 6 percent were at a 30 percent premium to global averages, the bank noted.