Will the Soufflé rise twice? (3)

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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

There may be oth­ers too of course, since the BIS data doesn’t go back that far for many coun­tries (and as sev­er­al Twit­ter cor­re­spon­dents point­ed out, there’s some­thing suss about the Cana­di­an data that implied there is no Loonie Bub­ble ; I’ll fol­low up on that issue in a future post). On the BIS data (which stops in 2012), only Bel­gium still had ris­ing prices – though we all know that Australia’s and the UK’s prices are now on the rise again, the lat­ter thanks to the UK’s ‘Help to Sell’ pro­gram (the equiv­a­lent of Australia’s now large­ly defunct First Home Ven­dors Grant). But on the BIS data, Aus­tralia, The Nether­lands, Bel­gium and the UK (in increas­ing order) are arguably unburst hous­ing bub­bles.

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PS The Busi­ness Spec­ta­tor arti­cle acci­den­tal­ly drops my cor­re­la­tion tables–or maybe they were con­sid­ered too nerd-like. They are repro­duced below:

And for coun­tries where there was less than 10 years’ data: