Until now Canada and Australia have been the great outliers in the real estate world. Both saw large increase int he value of their real estate mainly because both economies were more protected by the nature of the make-up of their GDP, both are huge exporters of natural resources.
Now it seems that Australia's real estate tide is turning, although these are early signals, and the nature of the Australian real estate market may make it more prone to short sharp shocks. it remains that in Sydney were wages are similar to those of Canadians (better weather but more flies) property prices have become stratospheric. In Mosman (the posh neighborhood across the bay from Sydney opear house) house prices are usually in the $3/4 million for anything detached. Also in Australia all properties are sold at auction, so on the day all those interested in buying show up and the house is sold (must be hard on the sellers in a falling market). An article in the WSJ seems to say that in many markets the tide is turning.
This could be a blip, but it remains that house prices in Australia are very expensive using almost any start point Australia is in the stratosphere (1988, 1993 or 2000) all show that Australian prices are up 525%, 340% and 250%, where as the data for Canada is 170%, 155% and 155%. Its worth nothing that only in the last decade has house prices increased more than the U.S. using 1988 and 1993 Canadian house price has risen by less than in the U.S.
If Australia, which is completely attuned to the Chinese market (more so than Canada which is driven by the US demand), then things are beginning to deteriorate for the raw material exporters.
Now it seems that Australia's real estate tide is turning, although these are early signals, and the nature of the Australian real estate market may make it more prone to short sharp shocks. it remains that in Sydney were wages are similar to those of Canadians (better weather but more flies) property prices have become stratospheric. In Mosman (the posh neighborhood across the bay from Sydney opear house) house prices are usually in the $3/4 million for anything detached. Also in Australia all properties are sold at auction, so on the day all those interested in buying show up and the house is sold (must be hard on the sellers in a falling market). An article in the WSJ seems to say that in many markets the tide is turning.
This could be a blip, but it remains that house prices in Australia are very expensive using almost any start point Australia is in the stratosphere (1988, 1993 or 2000) all show that Australian prices are up 525%, 340% and 250%, where as the data for Canada is 170%, 155% and 155%. Its worth nothing that only in the last decade has house prices increased more than the U.S. using 1988 and 1993 Canadian house price has risen by less than in the U.S.
If Australia, which is completely attuned to the Chinese market (more so than Canada which is driven by the US demand), then things are beginning to deteriorate for the raw material exporters.
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