Hostname: page-component-848d4c4894-v5vhk Total loading time: 0 Render date: 2024-07-07T02:13:28.665Z Has data issue: false hasContentIssue false
  • English
  • Français

Housing and the Global Financial Crisis: US versus Australia

Published online by Cambridge University Press:  01 January 2023

Nigel Stapledon
Nigel Stapledon*
Affiliation:
School of Economics, UNSW
Get access Rights & Permissions [Opens in a new window]

Abstract

In the housing cycle which started in 1996, Australian house prices have risen more than those in the US, prima facie suggesting that Australian prices should fall sharply. This paper questions that simple hypothesis. The reasons explored are: Australian prices have risen significantly less than those in coastal California, the more valid comparison; the Australian housing finance system contains fewer of the structural weaknesses of the US system; fundamentals in the form of the decline in real interest rates explain most, but not all, of the price rise; and macroeconomic conditions for housing in Australia are more favourable to weathering the global financial crisis.

Type
Symposium: The Global Financial Crisis
Information
The Economic and Labour Relations Review , Volume 19 , Issue 2 , July 2009 , pp. 1 - 16
Copyright
Copyright © The Author(s) 2009

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

ABS (Australian Bureau of Statistics) (2009a) A Picture of the Nation: The Statistician's Report on the 2006 Census, ABS Cat. No. 2070.0, January 2009, available: http://www.abs.gov.au/ausstats/abs@.nsf/mf/2070.0 [accessed 24 April 2009].Google Scholar
ABS (Australian Bureau of Statistics) (various) Statistician's Census Reports, Canberra.Google Scholar
ABS (Australian Bureau of Statistics) (2009b) Building Activity, Australia, Dec 2008, ABS Cat. No. Cat: 8752.0, April 2009, available: http://abs.gov.au/AUSSTATS/abs@.nsf/ProductsbyTopic/ADA6562044E1FBF2CA2568A900139362?OpenDocument [accessed 24 April 2009].Google Scholar
Bernanke, B. S. (2009) ‘The future of mortgage finance in the United States', The B. E. Journal of Economic Analysis and Policy, 9(3) (Symposium), Article 2, available: http://www.bepress.com/bejeap/vol9/iss3/art2 [accessed 24 April 2009].CrossRefGoogle Scholar
Bewley, R., Dvornak, R., Livera, V. (2004) ‘House price spirals: Where the buck starts', Commsec, Commonwealth Bank of Australia, Sydney.Google Scholar
Campbell, J., Giglio, S., Pathak, P. (2009) Forced sales and house prices, National Bureau of Economic Research Working Paper No. 14866, April.CrossRefGoogle Scholar
Case, K. E., Shiller, R. J. (2003) Home-buyers, housing and the macro-economy, Reserve Bank of Australia Conference on Asset Prices and Monetary Policy. Sydney, 18–19 August.Google Scholar
Eichholtz, P. M. A. (1997) ‘A long run house price index: The Herengracht index, 1628–1973’, Real Estate Economics, 25(2), pp. 175–193.CrossRefGoogle Scholar
FaHCSIA (Department of Families, Housing, Community Services and Indigenous Affairs (2009) National housing supply council state of supply report: 2009, available: http://www.fahcsia.gov.au/sa/housing/pubs/housing/national_housing_supply/documents/chap4.htm [accessed 24 April 2009].Google Scholar
Ferris, S. (2008) ‘The other sub-prime crisis', Actuary Australia, August, pp. 10–12, available: http://www.actuaries.asn.au/NR/rdonlyres/2B96251DF6C9-4611-AD80-A39C4F2B9722/4242/TheOtherSubprimeDebtCrisis.pdf [accessed 11 March 2009].Google Scholar
Glaeser, E. L., Gyourko, J., Saks, R. (2003) Why is Manhattan so expensive? Regulation and the rise in house prices, National Bureau of Economic Research Working Paper 10124.Google Scholar
Hubbard, R. G., Mayer, C. J. (2009) ‘The mortgage market meltdown and house prices', The B.E. Journal of Economic Analysis and Policy, Vol. 9(3) (Symposium), Article 8, available: http://www.bepress.com/bejeap/vol9/iss3/art8 [accessed 24 April 2009].CrossRefGoogle Scholar
Keen, S. (2009a) as reported in ‘Here's hoping Steve Keen takes his hike’, Bloomberg, News, reprinted in Sydney Morning Herald, 9 March, available: http://business.smh.com.au/business/heres-hoping-steve-keen-takes-his-hike-20090311-8uwr.html [accessed 24 April 2009].Google Scholar
Keen, S. (2009b) ‘Lies, damned lies, and housing statistics', Steve Keen's Debtwatch No. 33, 6 April, available: http://www.debtdeflation.com/blogs/2009/04/06/steve-keens-debtwatch-no-33-april-2009-lies-damnedlies-and-housing-statistics [accessed 24 April 2009].Google Scholar
Leamer, E. E. (2009) ‘Homes and cars: Why are the cycles in homes and consumer durables so similar?’, The B. E. Journal of Economic Analysis and Policy, 9(3) (Symposium), Article 5, available: http://www.bepress.com/bejeap/vol9/iss3/art5 [accessed 24 April 2009].Google Scholar
Macfarlane, I. (2008) Australia and the international financial crisis, The 2008 Lowy Lecture, Sydney, 3 December.Google Scholar
Meen, G. (2002) ‘The time series behaviour of house prices: A transatlantic divide?’, Journal of Housing Economics, 11, pp. 1–23.CrossRefGoogle Scholar
Nationwide Building Society (2009) Historical house price data website (previously Halifax Building Society), available: http://www.nationwide.co.uk/hpi/historical.htm [accessed 24 April 2009].Google Scholar
OECD (2005) ‘Recent house price development', Appendix 3, OECD Economic Outlook, 78, OECD, Paris, pp. 193–228.Google Scholar
Otto, G. (2007) ‘The growth of house prices in Australian capital cities: What can economic fundamentals explain?’, The Australian Economic Review, 40(3), pp. 225–238.CrossRefGoogle Scholar
Poterba, J. (1984) ‘Tax subsidies to owner-occupied housing: An asset market approach’, The Quarterly Journal of Economics, 99(4), pp. 729–752.CrossRefGoogle Scholar
RBA (Reserve Bank of Australia) (2003) Submission to Productivity Commission inquiry on first home ownership, Sydney, RBA.Google Scholar
RBA (Reserve Bank of Australia) (2009) Statistical table F2: Capital market yields — Government bonds, available: http://www.rba.gov.au/Statistics/AlphaListing/alpha_listing_i.html [accessed 24 April 2009].Google Scholar
Shiller, R. J. (2009) Home page, available: http://www.econ.yale.edu/∼shiller/ [accessed 10 April 2009].Google Scholar
Stapledon, N. D. (2008) A history of housing prices and rents in Australia 1880–2007. Paper presented to the Economic History Society of Australia and New Zealand Conference, Melbourne University, 13–15 February.Google Scholar
Stapledon, N. (2007) ‘Long term housing prices in Australia and some economic perspectives', PhD Thesis, UNSW, Sydney.Google Scholar
Stutchbury, M. (2008) ‘Bones of raw capitalism’, The Australian, 23 September, available: http://www.theaustralian.news.com.au/story/0,25197,24386492-5017771,00.html [accessed 20 June 2009].Google Scholar
Swan, P. L. (2009) ‘The political economy of the sub-prime crisis: Why sub-prime was so attractive to its creators', European Journal of Political Economy, 25, pp. 124–132.CrossRefGoogle Scholar
The Economist (2008) ‘Popping sounds: House prices are falling just about everywhere’, 4 December, available: http://www.economist.com/displaystory.cfm?story_id=12725898 [accessed 24 May 2009].Google Scholar
US Census Bureau (various) Statistical Abstract of the United States, Annual editions, Washington, DC.Google Scholar
US Census Bureau (2009) ‘Housing vacancies and homeownership (CPS/HVS)’, Annual Statistics 2008, available: http://www.census.gov/hhes/www/housing/hvs/annual08/ann08ind.html [accessed 24 May 2009].Google Scholar