SQM Research’s managing director, Louis Christopher, posted a series of tweets on Twitter last night noting that asking prices for Sydney houses had fallen for four straight weeks and that the falls “are becoming increasingly hard to ignore” (see below graphic).
As shown above, the shift down in SQM’s weekly vendor sentiment (asking prices) index is clear, with the index for houses down by 1.1% over the past month. While Christopher also notes that seasonality could be at play (given lower than normal listings and a high ratio of stock going to auction), the current decline contrasts with January 2013, where the index basically traded sideways.
According to SQM, the vendor sentiment index, which tracks housing market sentiment by measuring how optimistic sellers are about selling prices, has a high correlation (0.9 ) with the ABS house price index.
That said, with Sydney auction clearance rates remaining strong (see below table), the reported dip in the vendor sentiment could just be statistical noise.
Something to watch in the weeks ahead.
