Australia’s went down to here and bounced up again. Andthat was because of the impact of the first homeowner’s scheme. These people dived and took on mortgages.Ryan Yup. I remember that time.Steve And they fall. The trend for this to go negative. Yeah. And then the second time, around when, again, we started having a decline in mortgage debt growth. That when people started borrowing for all the investment projects in mining. So it boosts kind of the business side. And then, as debt started to slow down.
They were actually rising a percentage of GDP. That’s when investors followed the housing market again. So, consequently, what we have – this is the key what do valuers look for when valuing a property one I want to come down to in a moment. The key relationships – that’s the chart you can see right now.And I’ll explain the logic when we are actually in the interview. But what actually drives the market is an acceleration of mortgage debt. So what I’m graphing here, the blue line is changed in house prices in America and.
The red line is the acceleration, not the change, the acceleration of mortgage debt as a percentage of GDP. Okay, can you see the relationship?Ryan Yup. It seems to be in line with each other.Steve Okay. Yeah. One drives the other, so econometrics on this then it’s definitely the case. Accelerating mortgage that drives change in house prices.
Bryan Yeah, where the red line preceded the blue line.Steve Yeah. This is now looking at the – this is real house prices in America versus Australia since. So America had this big bubble and crash and now, some real house.