Almost missed this one. Residex on Friday released its house price index for the month of January. According to Residex, national median house prices fell by 1.2% over the month and units fell by 0.7%. Of the major capitals, Melbourne and Sydney recorded the largest price falls, declining -1.7% and 1.2% respectively (see below table).
We would recommend that readers do not read too much into the Residex figures, which is not our preferred house price index. The Residex series uses a repeat sales methodology that only examines purchases and sales of the same properties over time. It, therefore, can suffer from small sample sizes, it can be biased towards homes that sell more often (e.g. forced sales), and can be affected by renovations or capital improvements made to the property.
In our view, it’s better to wait for the release of the RP Data-Rismark hedonic index results for January, which should provide a more accurate picture of how the housing market is traveling. Nonetheless, this adds to the long-running trend that we have discussed at MB that neither credit nor house prices have budged from their downward trajectory.