RP Data has posted a Media Release analysing results from its Mortgage Index (MI), which was released last month. According to the MI, the Australian mortgage market grew at an annualised rate of around 10% in seasonally-adjusted terms during the eight weeks to 10 March 2013:
According to RP Data’s head of corporate affairs, Craig Mackenzie, the RP Data Mortgage Index (RMI) has surged over the past eight weeks, with the RP Data Mortgage Index (as at March 10) reaching 100.7 points, the highest reading since August 2009. This result highlights the extent of new market activity between the traditionally slow month of January and February.
In seasonally adjusted terms, the RMI Index increased from 76.9 to 78.1, foreshadowing a strong result for February when the housing finance data is released by the ABS in mid-April.
“Of greater significance is the fact that the raw Index value of 100.7 over the 28 days to March 10 was the highest since September 2009, which was a point in time when market activity was very strong, underpinned by high levels of first homebuyer activity stimulated by low interest rates and the First Homebuyer Grant Boost. This is supported by the fact that the average number of activity events across RP Data’s platforms per client was the highest since August 2009.
“This suggests mortgage market activity has rebounded strongly in February after the post-Christmas lull, driven by increased levels of consumer confidence, attractive mortgage interest rates (both fixed and variable) driving strong refinancing activity and improved investor demand,” Craig Mackenzie said.
The RP Data MI is supposed to be a real time indicator for mortgage market conditions, leading the ABS Housing Finance data by at least six weeks.
RP Data states that it manages in excess of 90% of all residential valuation instructions originating from the Australian financial services sector. Accordingly, its RMI has an 82% correlation with the ABS housing finance data and an 88% correlation when the seasonally-adjusted series is used.
I’ll admit that I don’t understand how RP Data has arrived at its result. In it’s weekly update to 10 March, RP Data provided the below capital city break-down showing a seasonally-adjusted monthly gain in the MI of 1.5% at the national level, despite big falls in NSW (-2.4%) and a slight fall in Victoria (-0.1%), which together account for over half of the nation’s housing market. Further, only Tasmania recorded an increase greater than the national average. I’m not sure what has happened here, but the claimed national result does not match the results at the individual capital city levels (see next table).
The full Media Release is provided below.
unconventionaleconomist@hotmail.com
RP Data Mortgage Market Activity Update – March 2013
Perhaps any bull could answer me why did house prices fall when our econnomy grew, unemployment was low and interest rates were at historical lows?
If you’re talking about the mid-2010 to mid-2012 period I’d say cyclical correction following 20%+ growth in the preceding 18 months. When prices jump 20% in a year and a bit you can expect a pullback of a few percent afterwards, nothing unusual there, happens regularly after strong growth, the market has a breather before the next leg up, which obviously began mid-2012 with prices up 5% already since then.
So, you are saying the past is a good indicator for the future? FAIL!
The past has always been a good indicator for the future. For example, every time in the past when I have gone outside while it was raining I got wet. This is a good indicator for the future, I am very likely to get wet if I go outside while it is raining. Many other things such as the sun rising in the east, day following night, all these things happened in the past are are a good indicator for the future.
Well the demographics will be very differnet. Tailwinds to headwinds. If you want to base the likely outcomes of the future, based on the past, then go right ahead. Capitalk gains assured and prices to the moon. Good luck with that.
My understanding is that the Mortgage Index is based on AVM requests coming through from mortgage originators.
The valuation is used to support a mortgage application. More mortgage applications implies a greater number of valuations requests.
As a leading indicator for mortgage activity (and implicitly, property turnover and sales) it is almost as real time as you can get. However, I’m not sure what you can really use it for yet.
Just anecdotal to my area, 4573, there are no reported sales for Jan and Feb. Confirmed by 1 local agent who did 1 sales in Feb.
Postcode anyone for Qld and NSW and I will check and report.
Paul you know that pds (the program that you use) doesn’t have that data yet.
Peter
Agents enter in the sales data into PDS and they show as red in the reports until settlement. So have all agents decided not to enter in any sales data for Feb?
In March 2010, I rang alarm bells to various people about the peaking stock on the market. I now see the lack of Jan/Feb sales as another major event.
Stock on market for 4573 is well down from it’s highs.
http://sqmresearch.com.au/graph_stock_on_market.php?postcode=4573&t=1
The Coolum area although nice isn’t popular like trendy Noosa, and it’s not close to Brisbane like the Caloundra to Maroochydore area.
The market there is dull.
I don’t know which Qld regional agents you phoned, but they may as well be in Timbuctoo as far as capital city sales are concerned.
Well time will tell Peter…be patient.
I have been checking other postcodes and I can confirm that agents are entering in the sales data, even when it has not settled. Still the sales volume for Feb looks as bad as I have ever seen it. Perhaps Peter you could check your data as Feb sales seems to have fallen off a cliff…
As you know Peter, Agents Advice is inputed and now, after talking to 2 other agents in regional qld, I can confirm that Feb sales are the worst on record.
Prepare yourself…
Really Paul, I just don’t know what to say in response to such authoritive data.
I guess I’ll just have to steel my resolve and take the bad news as it arrives.
Dam
And what postcode are you looking at?
Of course the fictional recovery and a resumption to the property boom must be happening Australia wide because Peter Fraser said so.
Thx, WillyN. You appear to have more timely and accurate ( inside!) information than the rest of us ( but equal to, Peter’s, of course!). I shall watch, and be prepared, with interest…..!
please don’t hold your breath Janet.
don’t be too prepared, ALL properties I have been tracking in postcode closeby to willywilly’s one (and quite many) have sold last month, and for really really good prices, I m very surprised, I would even say High prices, I would not have paid that much for most of them.All “bargain” are gone.I m now just waiting for good stock.
but February has been a banging month no doubt, look like 2009-10.
I respect your opinions as you are ‘in the market’, Peter. My conclusions are the polar opposite to yours of course, but that’s what makes any market! I will watch WillyN to see if there is another source worth watching.
I am only telling it like I see it and it is very different to previous months where agents advice on sales do go into the data. Why would they, around all of Qld, together stop entering in the agents advice of sales?
Yep, I will place a bet with Peter for a $10 scratchy, that Feb sales are a disaster in QLD and that house prices will resume their falls.
I do note that Peter does not feel that rising house prices far beyond cpi or wages growth is a good thing for an advanced society or its following generations, so I can assume he will be pleased when the falls start up again.
not sure what it s worth but, just looking at realestate.com.au/sold I found 45 sales(settlements ?) for February alone.Look very healthy.
Well something does not add up and I am only reporting it as I see and hear about it. One agent in Coolum reports 1 sales for Feb.
Do I trust realestate.com.au over my paid access to the actual data?
since rea is most likely very incomplete, there were probably even many more sales.You should ask your data provider.
Dam
And the postcode you are looking at is?
close to your, it s 4567 else it s some at brissie/GC (4878;4037;4067;4066;4064;4224;4228)
Well looking at 4567 your data does not hold up. See
http://www.thepauk.com/2013/03/4567-noosa-and-surrounds.html
I will do another post with just the charts for the other postcodes soon….
Well volumes do seem to be a problem to me in your selected postcodes…. and 2013 looks worse!
http://www.thepauk.com/2013/03/4878-4037-4067-4066-4064-4224-and-4228.html
RPData started valex some time ago. The lenders love it because a valuation is ordered but no one knows which accredited valuer will be used, so the valuation becomes more “hands off” than it was before when some lenders allowed a selection of valuers. This has become the new standard for lenders.
http://www.valex.com.au/
It has also given RPData yet another suite of data metrics for market analysis, and I think by now most commentators are coming to appreciate just how good they are becoming at analysis. Core Logic will be pretty pleased with their new toys.
In the process they get sufficient information, all input by banks or brokers, on the basics of loan applications. Based on a reasonable probability metric they should be able to predict lending volumes with some accuracy. They could report daily if they chose.
That said, I’m not seeing 10% growth – maybe 6% or 7% but not 10%, although it may still be happening.
A tad harsh and heated,BF! Here, In Godzone, we don’t have manipulated statics.. “NZ house prices rise 7.6% in February”
http://nz.finance.yahoo.com/news/nz-house-prices-rise-7-013750049.html
Does this data split between investors/speculators and owners? The other trend data we are seeing is investors/speculators going off at the gun and the rest of the community not moving.
I do find this surprising, but it is what it is – feels like investors/speculators are lifting themselves up by their bootstraps here.
Unless the speculators and investors are just reading the mood well – but really they are calling bull market return in the face of a debt maxed out community, a rolling over ToT and a potentially inflationary USD increase.
I’m neither bull nor bear on this, but i do so love to see the rentseekers lose money – here’s hoping.
A little extra spruik for the specufestors…..
http://www.theage.com.au/money/investing/investors-scramble-as-rental-crisis-bites-20130312-2fxj1.html
Alternative headline:
Record low interest rates drive record Aus mortgage debt level to new highs
From what I can tell in Perth, its going crazy,
Some RE Agent places have signs out saying they have no houses for rent or for sale…
Prices have jumped ridiculously in the last 3-5 months.
Blocks of land that are 400sqm now selling around 290k (not in known ‘nice’ suburbs. These are up from mid 200k end of last year…
WA is not a good marker for what is happening in the rest of Aus, but i am very glad i bought land in that area last year…
I was all for the Dont buy now train because i believe prices are a joke, but why not make the most of it if i can…everyone else is.
The “Don’t Buy Now’ mantra is idiotic.
The only ones who will be damaged are the ones who don’t buy and get left behind as prices take off.
DBN is very dangerous advice.