The Australian Financial Review today 19 September has no less than four articles disputing the existence of The Great Australian Land Bubble.

Your civic duty to buy, buy buy by Jennifer Hewett Page 2

RBA hoses down property bubble talk by George Liondis and Jonathan Shapiro Page 4

Why housing sector doesn’t need NZ-style handbrake by Samantha Hutchinson Page 44

Bubble? There is no housing bubble by Harley Dale Page 55

I sense a pattern. While the AFR – Australia’s premier business newspaper – has a mandate to protect property rights on behalf of investor readers, it is most amusing to see them out defending particular prices. The noise is deafening.

If there isn’t a bubble, why devote a square centimetre of newsprint to the subject? Surely the bearish minority can have their views – and miss out on the gains.

While we can tell each other comforting anecdotes and constantly check the rear view mirror, the data is undeniable.

Oz constant quality real housing price 660x275

Are prices elevated relative to history? Are the banks borrowing from overseas and lending freely to the preferred asset class? Is there widespread use of what Hyman Minsky called ‘Ponzi finance’? Is the country at a terms of trade climax with heavy investment levels now peaking? Is the pool of ‘Greater Fools’ willing to buy at inflated prices shrinking away?

Philip Soos’ definitive graph above outlines how property prices recovered from the devastating 1888-89 boom and bust in… Melbourne 1960 and Sydney 1968. That is two world wars and a great depression later. The 1888-89 boom was mainly in commercial property, yet resonated through the entire land market for seventy years.

Many property commentators will refer to the last ten or twenty years for historical context. I say, there have been two main eras in Australia’s short 130 year record. The current one is drawing to an irrational conclusion. Do not be long and geared at its climax.