The latest data from the BIS, which tracks residential property price growth has been released. It shows that home price inflation is widespread across many countries, and in that context, Australia (average 8 capital cities) is nothing special, we are in the middle of the pack.
Base-lined in 2010, this data series is the most comprehensive available, though with all the issues of matching data from multiple sources and translating it to a common basis. In most cases, this series covers all types of dwellings in markets for both new and existing dwellings in the country as a whole.
Hong Kong has the strongest growth, and New Zealand and Canada are both well ahead of Australia. We track quite closely with the USA. Spain sits at the bottom of the selected series.
We can also look at the change YOY, which shows that Australian residential prices are accelerating, whilst the macroprudential measures deployed in New Zealand is slowing growth there. Iceland, Canada and Hong Kong are all accelerating.
Two observations. First home price growth is not just a local issue – as we discussed recently there are a range of complex factors driving asset prices higher.
Second, whilst we are in middle of the pack in terms of home price growth, our total debt burden is much higher, we are near the top of the pack on this measure. Once again driven by a complex range of interrelated factors.
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