APM’s house price revisions

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By Leith van Onselen

Australian housing is back! Or its it? A quick read of the latest Australian Property Monitor’s (APM) house price results for the March quarter (release below) suggests that the Australian housing market has shrugged-off recent woes and has returned to growth, rising by 0.9% in the March quarter:

AUSTRALIA’S house prices rose slightly over the March quarter, bringing more positive news for the housing market.

Between January and March this year prices rose 0.9 per cent, the second consecutive quarter of growth, figures from property data provider Australian Property Monitors show.

The lift in prices over the past two quarters follows 15 straight months of falls, APM said…

And Melbourne recorded a surprise rise of 1.6 per cent, the figures show.

All capital cities apart from Brisbane and Adelaide saw their prices rise, APM said.

Dig a little deeper, however, and you discover that the bulk of the house price increases are due to significant downward revisions in the December and September quarters of 2011.

To illustate, consider the below tables from the latest (March quarter), December quarter and September quarter APM releases. Keep your eyes on the data in the red boxes.

First, the table from APM’s September quarter release:

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Now, consider the table from APM’s December quarter release:
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And, finally, the current release:

You will notice from the above tables that APM has made some major revisions to the September and December quarters, especially in Melbourne. The below charts show the magintude of the revisions by each capital city and nationally:

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My conclusion, then, is it is best to wait an extra quarter for APM to make its revisions before drawing firm conclusions about house price movements from their data.

Likewise, while revisions to data are the norm, APM should disclose their revisions when discussing market movements in order to avoid confusion, and to ensure both transparency and accuracy.

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APM Mar Qtr 12 House Price Report FINAL

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.