Housing stats - November 09
The ABS released the November Australian Housing Finance stats today. Housing in Australia seems to be one of the most discussed topics when commenting on the Australian economy. It also is one of the most misunderstood. Various commentators, the most prominent being Steve Keen from the University of Western Sydney, talk up "asset bubbles", especially in regards to housing and lament the fact that households have so much debt. In fact Steve Keen believes that debt is driving up property prices. So lets examine whether that statement is true. Firstly, it does appear that the average mortgage loan did go up last month. According to the ABS, the average loan for housing was $279,900, up from $272,000. While only an increase of 2.9% a month; annualized, this works out to 34.5% (or 8.7% per quarter). So we are definitely taking on more debt. But the question is whether this is growing at a higher rate than the asset price securing this debt. When looking at the ABS House price in...