Everything You Need To Know About Australian Housing In Ten Brilliant Charts


Australian house prices are surging on tight supply, a lack of construction, pent up demand and increased interest from self-managed super funds.

But amidst the discussion of a possible housing bubble and a lack of affordability, comes a series of charts from ANZ which provides some perspective on the debate.

The verdict?

  • Australian house prices are not that elevated relative to borrowing capacity
  • Australian house prices are not that expensive on an international comparison
  • The house price to household income ratio is as low as it has been in a decade
  • The population keeps growing but we aren’t building enough houses

It all adds up to a continued rise in house prices, and while fears of a bubble will persist, ANZ just doesn’t believe there is one.

Maybe Australian housing is moving to a permanently higher plateau – or is this Australia’s Irving Fisher moment for housing?

House Price to Household Income ratio is rising

But it's far from the recent peaks in 2003 and 2010. The RBA won’t be concerned because income is still rising faster than prices.

You can’t ignore the fact Australian mortgage rates are at generational lows

There's a lot of room for Australians to pay more for housing

In fact, if purchasing power is taken into account, there’s a 97% correlation!

Rental Yields are making housing a great return on investment

No wonder SMSFs want to buy.

We're squeezing more people into Australia but not building housing for them all

This has created a supply and demand imbalance.

There's a growing gap between housing supply and what the market needs

This is the result of the underinvestment in housing.

Vacancy rates are off their lows

But they're still well below the average since the late 1980's

Australia is only mid-range in house price gains since 2006

There's plenty of room for improvement - look at Singapore.

However, we're still contending with relatively high rates on a global basis

Making servicing mortgage costs as a percentage of income in Australia kind of expensive.

The surge in prices is being led by Sydney and Melbourne

Therefore, it has to be about supply and demand.

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