Contrasting housing markets

Housing is a subject that often produces strong polarising opinions, often based on whether the person expressing the opinion is an owner or a renter (unless you live with your parents or on the street you are one or the other) and whether your local property market has been rising or falling. Recency bias, personal perspective and local conditions all affect people's views on housing - posting an article on "rent v buy" on a forum will usually produce a predictable variety of responses.

Two stories about housing markets around the world caught my attention this week:

1. US household formation to increase: the decline of the US housing market has been a significant contributor to the recent financial crisis. This article from Bloomberg makes the case that the financial crisis has depressed the usual rate of household formation (e.g. adult children living with their parents for longer, couples deferring divorce etc). This represents a temporary state of affairs and, as the recovery continues, the rate of household formation will improve. In effect there is an element of shadow demand out there which will eventually become real demand. I find the reasoning quite persuasive. I would not be surprised if the recovery was sooner and quicker than a lot of people think - all the attention has been on the negatives (over supply, high unemployment etc) and the positives (lower prices, cheap loans, improving employment) have gotten a lot less space in either the media or the blogosphere;

2. Australian house prices decline: Another Bloomberg article covered the decline in Australian residential prices in the first quarter of this year. In stark contrast to the American market, the Australian housing market has been strong to the point where it is one of the least affordable markets in the world. Relatively low interest rates, rising population, low unemployment and an economy fuelled by a boom in exports of natural resources have all contributed to the rise. The recent decline (which is not large - 1.7% across eight major cities) has been attributed to higher interest rates and, in some parts of the country, increased supply.

If property was as easily tradable as equities, there would be quite a good case to exit the Australian market and buy into the US market. The comparative strength of the AUD against the USD would make the investment case even stronger. Leaving aside the fact that I do not own any property in Australia, the reality is that property is not as easily tradable as equities (REITs aside) and owning property in distant and unfamiliar markets can be a painful and daunting experience.

Is there an easy way for a non-resident to gain exposure to a recovering US housing market?