From Bloxo:
There is significant local debate about how much the Australian housing market is cooling. Various indicators are showing different trends. A prominent hedonic house price measure is showing stronger growth than the broad collection of housing price indicators. Auction clearance rates have also been high, suggesting price strength. At the same time, new housing loan approvals are below their 2015 peaks, housing credit growth has slowed and housing turnover has fallen. We see the collection of evidence supporting the idea that the housing market has cooled (and so does the RBA). This is welcome, after an extended period of strong housing price growth in Sydney and Melbourne. Our central view has the RBA on hold from here. If the housing market proves to be more resilient than we expect, this would further bolster that view.
Australia has a collection of housing price indicators. These indices take different approaches to dealing with the key measurement challenge, which is that there is significant variation in the sorts of houses that are sold month to month. For example, if a lot of large, well-located and expensive houses are sold in one month and smaller, less well-located, cheap houses are sold another, this can have a big effect on the raw median price measures. In this case, housing price growth would appear to slow, but this would not be a true picture of the change in price of the overall housing stock. Instead, it would be a reflection of the compositional changes in what was being sold month to month.
