Over the weekend, SQM Research released its new Vendor Sentiment Index, which gages the sentiment of vendors selling their properties on a weekly basis. Below is the Media Release pertaining to the new index:
Home Sellers Boosting Asking Prices
Vendors have been lifting their asking prices throughout the months of January and February 2013, according to the new vendor sentiment index released this week by SQM Research.
This index has revealed that capital city asking prices have risen by 0.4% for units and 1.5% for houses over the past ninety days, with some cities recording rises in excess of 3%.
A rise in asking prices suggests home sellers are becoming more confident of market conditions and that buyers are bidding more aggressively for real estate that is been offered at fair market value.
Perth, Darwin, Sydney and Adelaide are now all recording increased asking prices, suggesting that the downturn is well and truly over in these cities. However, Hobart and Canberra have continued to record weakness overall since the start of the new year. Vendors have not yet begun to lift their asking prices in Brisbane and Melbourne, which suggests buyers are still largely in control of the market in these cities.
Coolangatta and Palm Cove have revealed some of the steepest declines within the new index, in circumstances where vendors have had to lower their asking prices by as much as 49% over the past three years.
The findings are part of SQM Research’s newly released Weekly Vendor Sentiment Index (as measured by asking sales prices). The index gages the sentiment of vendors selling their properties, split into the categories of: all houses, 3 bedroom houses, all units and 2 bedroom units. This data will be made available on a national, capital city, regional and postcode basis.
The data from this index will be accessible for free in graph form on our website www.sqmresearch.com.au.
SQM Research believe that these indexes will be a superior leading indicator of the Australian Bureau of Statistics (ABS) Housing Price Series – as the correlation between the two has already proved to be astoundingly close – 0.97% correlation.
Louis Christopher, Managing Director of SQM Research says “I am actually surprised at how closely this new index correlates with the ABS house price series. Of course, we have built the index on similar geographical composites plus we have stratified the index in a similar way to the ABS. Overall I am very excited to bring this index to the market. It is a step forward in delivering timeliness and transparency to the property market and a step forward for SQM in making it the most respected authority on the housing market.”
The methodology of the Vendor Sentiment Index is provided below.
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.
