Thursday, February 17, 2011

Australia House Price Trends - If History Repeats Itself

[Q4 2011 Version of this chart, click here]

The Australian Bureau of Statistics publishes the Eight Capital Cities House Price Index

Conveniently they provide on this spreadsheet columns titled "Established houses percentage change from a corresponding quarter of previous year". So I plotted those.

Australia Established House Price Index Difference, Year on Year 2003-2010

Perth and Brisbane are already at 0% price change, year on year. And Perth's rate of change is looking rather precipitous as it crosses the line.

Another interesting thing jumps out about this graph. Perth, from 2003 until 2008, was a market unto itself. But something happened at the end of 2008, it fell into lockstep with the rest of Australia's cities. To me, this implies that a market distortion came into play that was powerful enough to affect all markets at once, the same way.

Partly because I am bored today, I decided to take the shape of Sydney, Melbourne, and Perth's declines from 2008 and project them onto the ends of the current declines in price difference. The earlier declines in Perth and Sydney are a perfect fit to the current declines. Only Melbourne ended up with a discontinuity.

Australia Price Changes with 2008 Declines Repeating*

What does this mean? Nothing really. Markets aren't that predictable. It's just something to look at.

* in the case of Perth, I used the 2006/2007 decline

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