Move Along, No Aussie Housing Bubble to See Here

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The price of Established Australian Homes rose 4.2% in 3Q09 according to a report released by the abs today. Melbourne led the gains with a rise of 4.7% in the September quarter closely followed by a 4.4% rise in Brisbane and a 4.3% rise in Sydney. The sharp upturn over the last 6 months in home prices across all capital cities is evident in the chart above.

Anyone arguing that the First Home Buyers Grants have not distorted prices should take a look at the chart above. Melbourne prices are up more than 10% in the past 6 months with Sydney prices up 9.4% over the same period. With the wind down from the souped up version of the grants currently underway, rising interest rates and deteriorating housing affordability, the pace of recent home price rises are unsustainable.