You know that horror-film trope where some piece of ominous information is missed by all the characters? Where the dire warnings of the one wise old Cassandra who spots what's going on are inevitably ignored?
Something similar is happening in Australia's frothy housing market.
Forget all the headlines about the undimmed pace of house price inflation -- up 19 percent in Sydney during March, pushing the median house price in the city to A$1.15 million ($875,000) according to Domain, a property-listings website.
House prices, after all, aren't so much a guide to the state of the housing market as to the 1 percent or so of homes that bought or sold in a typical year. Even there, they're less an indicator of supply and demand for housing than of how supply and demand for mortgage credit interact with real estate fundamentals.
Splurge on mortgage credit, and even an overbuilt housing market can enjoy price appreciation; cut back on home loans, and the opposite may be the case.
That's why it's worth looking at the state of rents. Right now, they're growing at the slowest pace in more than two decades, according to calculations based on Australian Bureau of Statistics data.
This hasn't completely escaped notice. Philip Lowe, who took over as Governor of the Reserve Bank of Australia in September, has included the same boilerplate reference (with minor cosmetic modifications) in each of the eight monetary policy decision statements he's put out so far:
In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years. Rent increases are the slowest for two decades.
As Lowe indicates, the reason for the slowdown in rents isn't hard to discern. For most of Australia's recent history, building has struggled to keep pace with household formation. Supply of new homes has kept close to demand, and as a result rents have tended to grow more or less in line with incomes.
That appears to be changing. You don't have to drive around Sydney, Melbourne or Brisbane for long these days to be astonished at the sheer volume of new apartments going up. The 548 cranes at work on residential housing in Australia at present are equivalent to almost three times the number across 14 North American cities surveyed by consultancy Rider Levett Bucknall, including New York, Los Angeles, Toronto, Chicago and San Francisco.
Compare the Housing Institute of Australia's forecasts of housing starts and the Australian Bureau of Statistics' forecasts of household formation, and the glut really comes into focus:
The surplus of homes that Australian cities have built over the past five years, based on those numbers, is equivalent to a whole year's worth of excess supply.
That's a worrying development for those hoping that Australia's house price boom is sustainable, especially given the way that the country's regulators look to be finally attempting to raise credit standards after years of laxity.
Still, if Australia manages to deflate the housing bubble without seriously damaging its economy, the heroes and villains will be quite different from the popular perception.
While governments and regulators spent years adding to the problem with tax breaks and hostility to macroprudential regulation, it may well be property investors and foreigners who helped ease the crisis.
One of the biggest drivers of the excess supply -- and a pace of rental growth that is at last letting Australians' incomes catch up to their housing costs -- has been a shift in the housing stock from single-family homes on quarter-acre blocks of land to apartments.
The number of apartments being built has tripled since 2009 and last year, one third of approvals were for such properties, according a paper published Thursday by the Reserve Bank's economic analysis department. Demand from investors and foreign buyers has been a key driver of that shift, according to the authors.
A nation that likes to blame a wave of Chinese buyers for the high cost of property should reflect on its good fortune. Were it not for all those foreigners and investors, Australia's housing could be even costlier than it already is.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.