What happened
Research from Charter Keck Cramer shows Australia's capital city housing markets are severely out of alignment. Melbourne units trade 26.5 per cent below their long-term relative-value norm, and Melbourne houses sit 17.1 per cent undervalued. Conversely, Adelaide units are at a record 35.5 per cent relative overvaluation, while Brisbane houses trade 11.2 per cent above historical relative norms.
Why it matters here
Historically, relative price dislocations across major capital markets eventually recalibrate, with 85 per cent of past episodes returning to equilibrium over a median timeframe of 18 months. Rebalancing does not necessarily require price drops in hot markets; it often occurs through subdued growth in overvalued cities while lagging markets gradually catch up.
What to watch
Shifts in capital city auction clearance rates, monthly listing volumes, and regional migration patterns over the next 18 months to track recalibration across state property markets.
Source
propertyupdate.com.au