Try telling West Australians there's a terrible housing bubble that's forcing our regulators to crack down on lenders. As they watch Perth prices fall around them, you'll get short shrift.
The locals in Adelaide, Brisbane, Darwin and Canberra will be similarly less than alarmed about what prices are doing, and perhaps more concerned that they could become collateral damage from the excesses of easy money and federal politics in Sydney and Melbourne.
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There's no housing bubble ... in some places
No, Australia isnât suffering a housing bubble. Sydney and to a lesser extent Melbourne might be, but the whole nation is starting to pay the price for it.
Friday's NAB residential housing survey and forecasts by independent property analyst Michael Matusik vary in extent, but agree in direction – Sydney and Melbourne remain hot, the rest of the nation not so much.
And if the regulators are successful with jawbone and bank-bashing in cooling the market, they also could be denying the provinces the benefits of the real estate arbitrage that sends would-be owners from the big smoke to the provinces.
The NAB survey of market professionals in the March quarter produced strong forecasts of house price growth in Sydney and Melbourne this year of 10.5 and 10.8 per cent, respectively, only cooling to 4.9 and 5.5 per cent over 2018. Units were forecast to gain 9.7 per cent in Sydney and 5 per cent in Melbourne this year, but hold effectively flat in Sydney next year and go down 2.4 per cent in Melbourne.
By comparison, Brisbane and Adelaide houses this year are forecast to firm just 1 per cent and 1.9 per cent, respectively, with growth remaining below 2 per cent next year. Perth is expected to fall another 3.4 per cent this year and be flat in 2018.
Matusik is a little less optimistic about Sydney and Melbourne detached housing and more optimistic about the rest. He gives a range for the year to March 2018 for each market. Sydney up 5 per cent to 7.5 per cent, Melbourne 7.5 per cent to 10 per cent, Brisbane 5 per cent to 7.5 per cent, Adelaide 2.5 per cent to-5 per cent and Perth flat to positive 2.5 per cent.
For attached dwelling, he pens gains for Sydney and Melbourne of 2.5 per cent to 5 per cent, of zero to 2.5 per cent for Adelaide and Perth and falls of 2.5 per cent to 5 per cent in Brisbane.
![Try telling West Australians there's a terrible housing bubble that's forcing our regulators to crack down on lenders.](/web/20170409235005im_/http://www.watoday.com.au/content/dam/images/g/v/d/n/d/r/image.related.articleLeadwide.620x349.gvg0ql.png/1491714553636.jpg)
Drawing a line through the two sets of forecasts, the housing markets outside Sydney and Melbourne aren't the stuff of crisis.
The regulators specify their concern is about the quality of lending, not housing prices per se, but there's no doubting what has the politicians worried.
Yet eye-watering prices in our two big cities eventually help decentralise the nation, forcing people to look further afield.
Cities and parts of cities rise and fall with the opportunity costs of housing and rent, particularly in the more artistic and creative end of endeavours. The bright lights of the biggest centres will always attract talent, but cost of living can as well.
In a better political world, where policy was based on economics instead of partisan positions, our housing excesses would be dealt with rationally. Yes, restricting negative gearing to new properties is the most obvious thing to do.
But we don't have such a world, creating a greater chance that the rest of the country will pay for Sydney and Melbourne excess.
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