Real Estate

House prices as a ratio of household income are at historic highs in Australia. Some people suggest that this is causing a housing bubble, analogous to the United States. Others suggest this ratio is no longer relevant, because other factors have changed.

There is intense debate as to whether Australia has a housing bubble. Metrics such as the historically high ratio of house prices to household income, which were indicative of the U.S. housing bubble, suggest a bubble. However, counterclaims suggest that this ratio reflects a permanent shift in the desires of Australian householders, or that a genuine lack of supply is here to stay. In addition, the cause of such a bubble is itself debated.