On Monday, I produced a chart pack benchmarking Australia’s current housing bust against prior episodes over the past 30-plus years, which showed that:
- Australia’s current price decline is the third longest since the early 1980s, but the second deepest in terms of depth;
- Sydney’s is the second deepest decline versus prior episodes, as well as the third longest in terms of duration;
- Melbourne’s decline is the equal second deepest thus far and the third longest in terms of duration; and
- Perth’s decline is both the longest and deepest in recorded history.
Today, I have benchmarked Australia’s current decline against those experienced by the US, UK, Ireland and Spain from the mid-2000s, commonly referred to as the Global Financial Crisis, as measured by the Bank for International Settlements:
As shown above, Australia’s current decline is relatively minor when compared to the other nations at only 7.8% over 16 months, compared to:
- USA: 32% decline over 63 months;
- Ireland: 55% over 69 months;
- Spain: 37% over 78 months; and
- UK: 18% over 18 months.
That said, at this stage of the cycle (i.e. 16 months in), Australia’s decline has been relatively steep, falling faster than the USA and Spain, but not as fast as Ireland of the UK:
Finally, I have benchmarked Sydney’s and Melbourne’s current decline against the other housing bust nations. As you can see, Melbourne’s decline has outpaced all other nations except the UK at this stage of the cycle (i.e. 14 months), whereas Sydney’s decline is basically tracking Ireland’s and beating the USA and Spain:
So, while Australia’s housing bust has a long way to go to match the other nation’s, it is well on the way.
I will update these charts over the months ahead.
