Sunday, August 30, 2015

Australian Houses Priced in Gold / Silver Ounces (2015)

Every 12 months I have been updating the data I keep on Australian house prices measured in ounces of Gold and Silver. Here is the latest update which takes us through to July 2015 (inclusive).

Data for house prices is via Residex (median house price indices).

Data for Gold and Silver prices is via Perth Mint (bid average AUD).

I have added Perth and Adelaide house price charts to the mix this year, but note the time frame is different to Brisbane, Sydney and Melbourne (due to limitations on available Residex data).

Key Figures:

Adelaide (Ounces to buy a house) 
Housing Peak Against Gold (February 2005): 501oz Gold
Latest Figures (July 2015): 282oz Gold, 21,439oz Silver
Based on Current Spot Price: 271oz Gold, 21,375oz Silver


Brisbane (Ounces to buy a house)
Precious Metals Peak (January 1980): 62oz Gold, 1091oz Silver
Housing Peak Against Gold (February 2004): 600oz Gold
Latest Figures (July 2015): 321oz Gold, 24,448oz Silver
Based on Current Spot Price: 309oz Gold, 24,375oz Silver

Melbourne (Ounces to buy a house)
Precious Metals Peak (January 1980): 67oz Gold, 1181oz Silver
Housing Peak Against Gold (February 2004): 661oz Gold
Latest Figures (July 2015): 450oz Gold, 34,253oz Silver
Based on Current Spot Price: 432oz Gold, 34,150oz Silver

Perth (Ounces to buy a house)
Housing Peak Against Gold (July 2007): 642oz Gold
Latest Figures (July 2015): 342oz Gold, 26,078oz Silver
Based on Current Spot Price: 329oz Gold, 26,000oz Silver


Sydney (Ounces to buy a house)
Precious Metals Peak (January 1980): 103oz Gold, 1811oz Silver
Housing Peak Against Gold (February 2004): 1100oz Gold

Latest Figures (July 2015): 670oz Gold, 51,028oz Silver
Based on Current Spot Price: 644oz Gold, 50,875oz Silver
 
(Spot Price ratio calculated on A$20oz for Silver, A$1580oz for Gold and July house prices)


A point of interest, Gold has outperformed most capitals since the last update, rising from $1360 in June 2014 to $1518 in July 2015. This has resulted in most cities seeing the ratio fall. That is with the exception of Sydney where house prices have outperformed Gold and rose a blistering 21% YoY to July 2015.

It's also interesting how much later the peak for Perth property (to Gold) came as house prices boomed there into 2006/2007.

My view going forward has not really changed from my update last year: "Over the same period (next 3-5 years) I expect rising precious metal prices and a lower Australian Dollar, so do think investors stacking ounces for the eventual purchase of a house will be rewarded (even those in Sydney). Only time will tell if I'm right."

Here are the charts (click any to enlarge).








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