Australia’s housing fuel is running dry

Tuesday 29 March 2016

Earlier this month I charted the monthly ABS housing finance data against the monthly RP Data dwelling price index, and concluded that “with housing finance growth past its peak in all major markets, it should also mean that price growth is also past its peak in each respective market”.

With the release last week of the ABS house price data for the December quarter, I thought it would be useful to plot quarterly housing finance growth (excluding refinancings) against the ABS’ quarterly house price series to see whether it backs-up my prior conclusion.

Here’s the long-term view, which shows a strong correlation between housing finance growth and house price growth nationally:

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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.