This website provides real-time bubble indicators for housing markets in the eight Australian capital cities and primary New Zealand regions. These indicators provide a direct quantitative measure of the extent of housing fever in these major metropolitan areas. The measures are benchmarked against housing and macroeconomic fundamentals so that they provide a statistical mechanism for assessing the existence and the degree of speculative behaviour in these housing markets.
The markets considered are as follows.
Price-to-rent ratios in all Australian capital cities continue to head down this quarter, with the decline steepest in Sydney. The bubble signal for the Sydney housing market has been switched off since Dec 2021. The signal for the Melbourne market remains on but its non-fundamental component has begun shrinking in 2022Q3, following the lead of
In terms of methodology, we made a few significant changes in this quarter’s update. We replaced the rental index obtained from the Australian Bureau of Statistics (ABS) with those from CoreLogic, as the rental data from CoreLogic reflects current market conditions better than those from ABS. This modification has led to significant changes in the
The latest data for the first quarter of 2022 show evidence that changes in economic fundamentals are now being reflected in housing market data, particularly for New Zealand. Rising inflation in both countries is lifting construction costs and putting downward pressure on real rents. Policy changes In New Zealand to boost the supply of state
This project is supported by the Australian Research Council under Project No. DP190102049.