Today’s daily chart in the Economist magazine details house prices and some related series for a number of countries, in many cases back to 1975. Eyeballing the data there are a few things that I find surprising. There is still a lot of talk of bubbles in Australian house prices, yet if you look at real house price levels they are only about 2.5 times 1975 levels – roughly the same increase as Britain, and an annual increase of only around 2.8%. In the case of Australia that is close to real per capita GDP growth, which is about what you’d expect. Interestingly, in 2006 real prices in both Australia and the US were about double 1975 levels, since which time US prices have of course fallen significantly so that they are now only about 20% higher than in 1975. Maybe Australian house prices are still too high, but it seems more likely to me that US house prices are currently too low. Of course there are some explanations for the very low rates of real price appreciation in the US – slow growth in median wages being one factor. But the population is still growing, and the US of course has a much larger population than Australia, so it is surprising to see so little in the way of house prices increases. And if you want to see what declining populations do to house prices look at the series for Japan – the issue there is not so much that the property bubble bust in 1990, but that prices have continued to fall for the past 22 years.