Via the ABC:
The Reserve Bank of Australia (RBA) considered asking private firms to stop telling Australians about slumping property prices, when the early period of coronavirus panic stoked fears of a housing market crash.
In a release of highly classified documents from inside Australia’s central bank, economists discussed the need to treat the housing market as dysfunctional — and potentially shut down data sources letting investors know.
Lindsay David, the founder of LF Economics, said it was shocking the central bank would contemplate asking private sector data collectors to stop informing the public.
“I personally think it’s absolutely disgraceful conduct by the RBA that they have appeared to resort to giving what appears to be a manipulation of the information members of the public do and do not have access to in relation to house prices and debt.”
Stopping perceptions of a crash
In April, economist Nick Garvin wrote to colleagues warning them the bank should stop analysing the housing market as if it were operating normally, and calling for a halt — as happens to stock trading in emergencies.
“I think it’s dangerous for regulators to be reporting on housing prices as though the market is currently functioning,” he wrote.
Because real estate agents could not operate normally at the time — auctions and viewings were banned or highly restricted — the economist argued “so, ‘paused’ would be a fair classification”.
He went on: “We should also tell private sector data providers to follow this rule. If people start mistakenly thinking that we’re experiencing a housing market crash, it’s not going to help things.”
CoreLogic denies RBA demanded data removal
The key private sector provider of information about real estate in Australia is global giant CoreLogic (formerly RP Data).
Its daily index stopped being published on May 20.
But CoreLogic head of research Tim Lawless denied it was because the RBA demanded it.
“We received no correspondence from any of our clients asking for our market-facing indicators to be removed from publication,” he said in a statement.
“The decision to remove the daily index series from publication on the CoreLogic web site was a cautionary move made due to concerns about the potential for volatility in the daily series at a time when sales activity had fallen by around one third in a month.
“This was a prudent decision at a time when sales observations had fallen sharply.”
Mr Lawless said the company had continued to publish an “end of month” index.
Production of the daily data has been continuing, unseen by the public, and will be re-published from today.
Property analysts are gobsmacked the RBA would consider reducing the transparency of information in a key investment market, particularly in an emergency period.
“Quite frankly as a property market information supplier, I am alarmed by intended communications for ‘private data providers’ to follow,” SQM Research managing director Louis Christopher said.
“Was this prompting the real reason why CoreLogic suspended their daily index from public viewing shortly after? This raises serious questions on the independence market data providers have with the RBA.”
The RBA declined to respond to further questions.
I have no special insight into this but I’d set the odds on the RBA nobbling CoreLogic data very short indeed.