It appears that CoreLogic’s dwelling values index remains on the nose with the Reserve Bank of Australia (RBA), with the RBA refusing to acknowledge it in its discussion of dwelling prices in Friday’s bi-annual Financial Stability Review (FSR):
Housing price growth over the past six months has remained below recent peaks, especially in Sydney, which was previously the most buoyant market (Graph 2.1).
In the more mining-intensive states, housing prices have been broadly flat in Brisbane and Perth. Nonetheless, housing market activity in Sydney and Melbourne has shown signs of strengthening in recent months. In both cities, price growth has nudged higher of late and auction clearance rates have risen to high levels.
Readers might recall that in early August, the RBA abandoned the CoreLogic index in its Statement of Monetary Policy, claiming that the index was “overstated” due to recent methodological changes.
The RBA followed-up later in August when it released its Minutes, which again stated that “growth rates were overstated because of changes to CoreLogic’s methodology”.
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As we have argued repeatedly, we won’t be able to gauge the full impact of the methodological change, and the true state of the market, until CoreLogic backward adjusts its daily index to its inception (in March 2011) using the new methodology and releases this to the market.
It also appears that the RBA will keep CoreLogic on the sidelines until the newly revised index is released and integrity is restored.
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.
