During the peak of the last housing cycle in 2017, MB coined the phrase “shrinkflation” to describe the peculiar situation whereby housing prices rise strongly alongside crashing sales volumes.
Australia’s housing market is experiencing another round of shrinkflation with dwelling values surging at the same time as turnover remains anaemic.
The latest evidence comes from CoreLogic, which shows that sales volumes are way lower than the same time last year:
The volume of properties for sale are also way below last year:
This supports MB’s view that is a very ‘thin’ market, and while dwelling values are rising strongly, the housing market isn’t exactly healthy.