Down, but no recession yet.

“On quarterly figures, as of the first quarter of 2023, house prices, building approvals, and lending for owner-occupation and investment are all headed downward, led from the demand side. Among these trends, the only bullish sign is the dip in building approvals, which, over time, has a negative effect on supply.”

– Dr Gavin Putland, 2 April 2023

But not to worry, folks, because the new ‘Kavanagh-Putland Ratio‘ isn’t indicating a recession before 2025. That’s to say, even if the aggregate weight of residential, commercial, rural and ‘other’ real estate sales to GDP were to decline drastically in 2023, there’s usually a 12-month lag before economic recession will set in.

But, yes, 2022 is our highest peak yet! Despite the price drops, there was an enormous aggregate turnover of real estate sales!

The new ‘ratio’ is based upon Commonwealth Grants Commission data showing total Australian real estate sales per capita divided by GDP per capita (from ABS National Accounts).