The big jump in the RP Data dwelling price index in April, which rose by 1.7% over the month and re-accelerated to 7.5% growth year-on-year, seemed counter-intuitive given the recent sharp slowing in housing finance commitments, which generally tracks house price growth very closely (see below chart).
Yesterday, Cameron Kusher from Core Logic-RP Data published an interesting blog post which helps to explain why housing finance and prices have diverged – principally because transaction volumes have fallen even further than the value of finance commitments:
