Document Type
Discussion Paper
Publication Date
7-11-2023
CFDP Number
2381
CFDP Pages
9
Journal of Economic Literature (JEL) Code(s)
C12, C13, E43
Abstract
Australian housing markets experienced widespread and, in some cases, extraordi-nary growth in prices between 2020 and 2023. Using recently developed methodology that accounts for fundamental economic drivers, we assess the existence and degree of speculative behaviour as well as the timing of exuberance and downturns in these markets. Our findings indicate that speculative behaviour was indeed present in six of the eight capital cities at some time over the period studied. The sequence of events in this nation-wide housing bubble began in the Brisbane market and concluded in Melbourne, Canberra, and Hobart following the interest rate hike implemented by the Reserve Bank of Australia in May 2022. As of March 2023, the housing markets in Syd-ney, Canberra, and Hobart had broadly regained stable conditions, while Melbourne is more gradually returning to its normal state. In addition, over-corrections against fundamentals are evident in the housing markets of Brisbane, Adelaide, Darwin, and Perth. For regular updates on the housing markets, readers may visit the authors’ website at www.housing-fever.com.
Recommended Citation
Shi, Shuping and Phillips, Peter C. B., "Housing Fever in Australia 2020-2023: Insights from an Econometric Thermometer" (2023). Cowles Foundation Discussion Papers. 2784.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/2784