Steve Keen hasn't given up on Australian house prices - same for farming?

How to spot a housing bubble before it bursts

Steve Keen15 October, 2013.

After a bubble has burst, no one denies that it existed. But before it does, the popular refrain is that though bubbles existed elsewhere in the world, “there’s no bubble here”. So housing bubbles are admitted to have existed in Japan, the USA, Spain and Ireland – because they’ve already burst.

But the rest of the world – and especially Australia – is different. House prices in Australia, the UK, and everywhere in between where they are still rising, are justified by … (fill in your favourite fundamental reasons here) and are not in any way manifestations of bubbles.

Read the rest here - http://www.businessspectator.com.au/article/2013/10/15/economy/how-spot-housing-bubble-it-bursts

Part 2 - Housing hopes: Will the souffle rise twice?

My previous post on house price data from the BIS (How to spot a housing bubble before it bursts, October 15) scotched one part of the ‘No Bubble Downunder’ case: Australia is one of four countries where house prices are more than twice as high as they were in real terms in 1985 (see Figure 1).

Figure 1: The Bubble Contenders

Part 3 - The housing bubble Whodunnit

  

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This arti­cle is the third in a series on Australia’s hous­ing mar­ket. Read the first arti­cle here and sec­ond arti­cle here.

In the last two arti­cles in this series, I argued that Australia’s house prices “walk like a duck” – using BIS data, Aus­tralia is one of only four coun­tries where prices are twice as high in real terms as they were in 1985. And they “quack like a duck” – accel­er­at­ing house­hold debt is a major dri­ver of ris­ing house prices, as in the other present and past house price bub­ble economies (the US, Spain, Japan, Nor­way, the UK and Den­mark). So hav­ing con­cluded they’re a duck, what species of duck are they?

At first glance, the Aus­tralian house price bub­ble does appear to be a dif­fer­ent species to its Euro­pean and Amer­i­can brethren. Tack­ing Nigel Stapleton’s data onto the ABS series, we can develop an index for Aus­tralia going back to 1880 – com­pared to 1890 for America’s Shiller Index and (wait for it) 1628 for the Heren­gracht Canal Index. With 350 years of data, there is clearly no trend to the Euro­pean series; and after the sub­prime crash, any argu­ment that there is a trend to US prices now looks pretty shabby – even though prices are clearly ris­ing once more in the Land of the Sur­veilled (see Fig­ure 1).

Fig­ure 1: Long term real house price indices

- See more at: http://www.debtdeflation.com/blogs/2013/11/04/the-housing-bubble-whodunnit/#sthash.KjNFvAmy.dpuf