RBA: How investors juiced Australian house prices

Wednesday 24 September 2014

The Reserve Bank of Australia (RBA) has released its biannual Financial Stability Review (FSR), which has devoted an entire section to property investment.

Included in this section is the below chart, which shows the very strong correlation between the share of total housing finance commitments to investors and dwelling price growth, and suggests that Australian house prices are primarily driven by investors (speculators?):

The full text of this article is available to MacroBusiness subscribers

$1 for your first month, then:

$24.99 / month

$249 / year

Cancel at any time through our billing provider, Stripe

About the author

Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.