How Australia’s housing crash compares internationally


By Leith van Onselen

On Tuesday, 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 at the capital city level is the third longest since the early 1980s, but the 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 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 9.2% over 18 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. 18 months in), Australia’s decline has been relatively steep, falling faster than the USA and Spain, but not as fast as Ireland or 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. 16 months), whereas Sydney’s decline is beating the USA and Spain:


So, while Australia’s housing bust has a very long way to go to match the other nation’s, it is so far on track.

I will continue to update these charts each month.

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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.