Over the weekend, the AFR was headlined non-stop by the Domain leech:
The story was a non-stop uber-bullish tale of endless price growth, bullish fundamentals and hysterical buyers including this:
Demand for homes is booming in Sydney. Last weekend, the NSW capital posted an auction clearance rate of 84.3 per cent, its highest in 14 months, and raising expectations that banking regulator APRA would have to step in again to force lenders to tighten credit to investors making the most of ultra-low interest rates.
Prices continue to rise, although most commentators expect the pace of growth to moderate from last year, when Sydney homes jumped 11.5 per cent, as the growth in dwelling prices that is outstripping wages exhausts the ability of many to pay more.
On which index?
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Domain is referencing CoreLogic (that is formerly RP Data), now favouring it over its own index (APM) which is showing a less than sparkling sub-2% growth rate. Residex was out last week and was down to just 3.9% over the year. Of course, the Reserve Bank of Australia has now abandoned the CoreLogic index since its metholodological change in May sent it rocketing away from everything else in the market.
Also ignored in the story is the evidence of the clear bust underway in Sydney investor finance:
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And the falling number of transactions now showing up in stamp duty:
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At this stage, I’m not going to say definitively one way or another how strong are Sydney house prices. There’s doubt about it.
But that’s the point. None of this material is mentioned in the story. Indeed, it is studiously avoided, even the evidence generated from within the same firm which is marginalised in preference for the more bullish and questionable index of a competitor.
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Domain and its realty propagandists are a giant parasite sucking the journalistic marrow from a once great publishing house.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
