What Will Australian House Prices Do With Rising Oil Prices and Inflation?

How You Boil Water When Oil Prices Go Up

In the 1973 Oil Shock, oil prices went from $4 to $12 in 18 months

Inflation in Australia hit 9% in 1973, then 15% in 1974

During this period Australian mortgage rates went from around 7.5% to 9.5%

Given this information, what do you think property prices did?

I bet its not what you thought.

I certainly found it surprising.

Sydney house price growth:

	Oil Price	Sydney % Growth	Inflation	Sydney Real % Growth
1973	4.7	14.9%	9%	5.9
1974	12.2	37.7%	15%	22.7
1975	13.1	4.4%	14%	-9.6
1976	13	1.4%	13%	-11.6

*Email me for full spreadsheet for details 

Now there are many other unique factors in every crisis, but if you are sitting waiting for this to all be over at the beginning of a period of high inflation, to purchase a house or an investment property, you may be doing the exact wrong thing.

Stay tuned for the next newsletter about what house prices did in the second oil shock in the late 1970s

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• Spreadsheet details