SQM Research’s managing director, Louis Christopher, has released another report measuring the over/undervaluation of Brisbane’s, Adelaide’s and Perth’s housing markets against GDP, which shows that Perth’s is the only major market that is currently undervalued:
Brisbane
On our measurement, Brisbane is offering close to fair value. This comes after an extended period whereby there has been a slow wind-down of housing prices relative to incomes. The worst overvaluation recorded was early 2008 whereby the market was 45% overvalued. This occurred as a result of the Brisbane housing boom of 2003 to 2008 – a period where housing prices doubled in just five years. Our expectation for the remainder of this year is that the market will respond to the rate cuts and relative loose credit. We are forecasting a 0.6% rise in housing prices for the current September Quarter and a further 1.5% for the December quarter.
The full text of this article is available to MacroBusiness subscribers
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.
