RP Data’s Cameron Kusher has produced an interesting post on Australian housing values in the wake of Wednesday’s June quarter CPI release from the ABS:
At a headline level, combined capital city home values have increased by 10.1% over the 2013/14 financial year. The latest CPI data showed that inflation was recorded at 0.5% over the second quarter and at an annual rate of 3.0% throughout the 2013/14 financial year.
…home values generally remain well below their previous peak (in real terms) across the capitals. In non-inflation adjusted terms home values are higher than their previous peak in: Sydney, Melbourne, Canberra and Perth. Once you account for inflation, Sydney is the only city where values are currently higher than their previous peak.
RP Data’s assertion that Australian housing values are nearing their former peak in real inflation-adjusted terms is broadly supported by the RBA’s dwelling assets data, which was around 5% below its 2010 peak when measured against GDP as at March 2014 (see next chart).