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.
Downward momentum of the price-to-rent ratios continued during the current quarter in the Sydney, Brisbane, Adelaide and Perth housing markets. For other cities, like Melbourne, Darwin and Canberra, the price-to-rent ratio either increased slightly or stayed at a similar level. The 2020-2022 housing bubble involved six capital cities (Sydney, Melbourne, Brisbane, Perth, Hobart and Canberra).
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
This project is supported by the Australian Research Council under Project No. DP190102049.