It's traditionally said that property crash risks are heightened by:
1 - very high interest rates causing homeowners to default on mortgages;
2 - severe recession;
3 - very high unemployment; or
4 - a significant oversupply of properties.
Personally, I would probably add to that list:
5 - credit market illiquidity or seizure.
So which Australian capital cities are exposed to the highest risk of a crash? I won't add a great deal of commentary today. Interpret for yourself (click the charts to expand them).
1) Very high interest rates?
Not now. Generational lows in fact.
2) Severe recession?
Equally, as you might expect, Victoria and New South Wales would always show as being very heavily in deficit, as they have been for decades.
Such is the nature of a mining and resources focused country.
The obvious alternatives could include Gross State Product or State Final Demand which are figures from the detailed GDP release, but that still might still be a 'clunky' approach.
At a state level the trend in jobs are being added is as follows:
3) Very high unemployment
Victoria isn't looking too smart at the moment, but whether this proves to be temporary or not remains to be seen.
Western Australia has the lowest unemployment rate of any state, but the trend is rising gently as the mining construction boom recedes. This is one to keep an eye on.