After adjustment for inflation, rises in Australia have ranked behind Hong Kong, Switzerland, Austria, Germany and Canada.
“Since the GFC, volatility in prices has increased, with two periods of quite marked national declines in prices followed by strong rebounds,” says Münchenberg. “Much of the recent focus has been on strong house price growth in Sydney, but over the past ten years the price increase in Sydney is unremarkable when compared to other capital cities.”
Meanwhile, the Reserve Bank is struggling to manage the two-speed economy while the government fails to lift productivity and cut unemployment. With Australia facing the highest unemployment rate in 12½ years, slumping business spending and deflation spreading around the globe, more RBA stimulus would seem in order. However, with many Australian housing markets reaching unaffordable levels, reducing rates will only exacerbate this further.
