Is RP Data missing its seasonal adjustments yet? From ANZ via the SMH blog:
Household sentiment has fallen sharply in the wake of the federal budget and appears to have hit home buyer confidence. Despite strong auction listings in the past week, home buyer demand has eased in the past month with auction clearance rates falling toward long term averages following a period of significant out-performance.
Prior gains in house prices had effectively closed the ‘affordability gap’ in Sydney, Melbourne and Perth and soft wages growth and deteriorating sentiment will increasingly constrain further price gains, particularly in 2015 when the RBA begins the task of returning monetary policy towards a more ‘neutral’ setting.
Housing market momentum has eased with clearance rates falling particularly in Melbourne. Nonetheless housing market fundamentals remain supportive and prices are likely to consolidate in H2 2014.
The RP Data daily house price index is delayed by many weeks. It is not a real time price index. It is a house price index reported daily. The price falls we’re registering now are pre-Budget. It’s possible that the pre-Budget build-up hit housing but auction clearances have been decent enough over the period, certainly holding up better than broader consumer confidence.
RP Data index weakness remains seasonal until proven otherwise.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
