Saturday, August 18, 2012

Global House Prices: Australia Compared

One of my favourites among the excellent Daily Charts at The Economist is the Global House Prices Interactive Graph.

You can fiddle with it to get the date and country comparisons you like going back as far as 1975 for many developed economies and a few others, although not all data goes back to 1975.

Here are a couple of screen shots of comparisons I did ...

Apart from the unfortunate graphical detail that they are all shades of blue green (yes I am crap at colour differentiation), what is interesting about this long-term look is just how amazing has been both Spain and Ireland's rise and fall.

Over the longer-term, it makes the United States' recent fall relatively benign looking.

Germany's house prices are a paragon of stability and Australia's price rise also looks relatively benign over the longer term. Comparing just Australia, Ireland and the US makes the picture a little clearer (but why are they all blue-ish?). Ireland is the hill (mountain?), Australia the gradual rise and the US is at the bottom.

Even more impressive(?) has been the increase in South African house prices since 1975. It also puts Japan's collapse in prices in some perspective. (It'd be interesting to see a commercial property index comparison ... no really it would)

If we shift the starting point, we get a slightly different picture. Here's some selected countries starting in Q1 1985,1995, 2005 and 2008.

If we start from 1995 we can clearly see the continuation of the decline in Japanese house prices. Ireland, Spain and the United States are still above their 1995 base.

This is not the case if we start from 2005. The interactive also provides a lesson in how we can manipulate statistics by choosing our starting points. From a 2005 starting point, Australian prices look positively fabulous in comparison with the basket-cases!

From 2008 the picture is better for the US but still very bad for Spain and Ireland. Given what a disaster US housing has been, it makes you realise the extent of the crisis in Ireland and Spain. It also highlights just how well Australian house prices have held up.

If we go from 2009, we see the US prices have again fallen, but Australia continues to stay above water.

But from 2011 all of our team have fallen. Boo hoo.

Here's a few others that might be of interest.

China and Germany from 2001 (the first year data from China is available).

The Germans seem to have their property market just right, gradual growth, just like we want for inflation.

Here's from 2008 for another few.

For a more in depth analysis of the data see the work of Leith van Onselen from MacroBusiness.

Personally, I'm still hoping for further price declines in the inner suburbs of Brisbane over the next few years.

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