More factors affecting housing prices

Comments on Christopher Joye “Popping the hedge funds' bubble”, 9/09/2010, http://www.businessspectator.com.au/bs.nsf/Article/Popping-the-hedge-funds-bubble-pd20100909-94UB9?OpenDocument&src=sph
Joye argues that many hedging on the Australian housing prices are overvalued and are going to burst are not supported by more accurate estimates.

While a more accurate price to income ratio is good for international comparison of affordability or potential bubbles in housing market, it may be also desirable to include some data for differences in housing quality, such as average housing areas.

It is obvious those larger houses are more expensive than smaller ones, assuming all other things equal.

Another point of interest is differences in land price that may reflect how efficient a country may be in terms of its housing market.

Are land prices the same of different with population density?

PS: Christopher Joye is managing director of research group Rismark International which produces the RP Data-Rismark Hedonic House Price Indices. Rismark also operates a series of funds that invest in residential mortgages.

Rismark shows that the price income ratio for Australia as a whole is 4.6 as opposed to 7.5 by US investment legend, Jeremy Grantham, who captured global media attention with the claim that Australia’s housing market was a “time bomb” on that basis.