Macro Investor: Will an iron fist hit Perth housing?

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Owing to Western Australia’s distinctive commodity exposure, the Perth property market is subject to a different cycle to the reast of the nation.

Unlike the major east coast capitals, where all four house price series have tracked each other closely over time, there are significant divergences in Perth, with the ABS providing the most positive results and Residex the most negative (refer to the August 6 issue for an explanation of how each house price series is constructed).

Perth housing has been in the doldrums since 2007, with real house prices falling by between -6% and ‑20%, depending on the indices, over the past five years. As such, Perth fundamentals look more sound than many other Australian cities.

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Yet is history is any guide, the recent heavy falls in iron ore prices may have something to say about that…

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.