We report supply elasticity estimates of residential property (houses and apartments) for Local Government Areas (LGAs) in metropolitan Sydney. Using annual data for 1991-2012, the average supply elasticity estimate across all LGAs is 0.2 for houses and 0.8 for apartments. The supply of houses...

We examine whether asset pricing theory can explain residential property prices. Using quarterly data for Local Government Areas in Sydney from 1991 to 2006, we find little evidence that variations in price: rent ratios anticipate future real rent growth. Instead changes in price: rent ratios...

Using recently developed econometric procedures (Phillips, Wu and Yu, 2011; Phillips, Shi and Yu, 2015), we find evidence of temporary episodes of explosive behaviour in price-to-rent ratios for established houses, in five of Australia's largest cities. One interpretation of our results is that...