REA Group’s data business PropTrack today launched a new index tracking monthly changes in Australian residential property prices.
According to the media release:
The PropTrack Home Price Index is Australia’s first monthly revised residential property price index providing timely and unique insights to help Australians make the most informed property decisions.
The PropTrack Home Price Index is a revisionary index that enables a new level of analysis and insight each month using a robust and flexible method, which also allows the Index to best reflect historical market performance. Price estimates will be available for houses and units at a national, capital city and rest of state level, in addition to select top performing regions…
The PropTrack Home Price Index will be available on the first day of every month.
The model used in this index is a hybrid methodology that combines repeat sales and hedonic regression. Both of these methodologies are commonly used to measure housing price movements in Australia and overseas. These methodologies are designed to estimate the change in home prices in a way that is not affected by the quality and location of the unique homes that transact in a given period.
The methodology behind the new property index is explained in greater detail here.
Turning to March’s results, PropTrack has reported 0.34% growth nationally, with significant variation across markets:
Regional areas continue to outperform the capitals in the post-pandemic market. Regional prices rose 0.62% in March and by 24.8% year-on-year. This compares to 0.24%/15.7% monthly/annual growth across the combined capitals.
According to PropTrack, price momentum has slowed materially so far in 2022, with headwinds building:
Home price growth has slowed considerably in 2022. The increase in prices across the country in March 2022 was at the slowest pace since May 2020, after national pandemic lockdowns…
The slowing in price growth reflects the reduced influence of lower interest rates. Fixed mortgage rates have already increased over recent months and larger rises are expected as the RBA increases the cash rate – widely expected later in the year.
The outlook for price growth remains subdued, with the speed of official interest rate hikes the big unknown for the market in 2022…
The next chart, which tracks annual price growth across the six state capitals, shows that momentum is slowing across all markets; although Brisbane and Adelaide peaked much later:
Later this morning CoreLogic will release its official dwelling value results for March. I provided a sneak peak yesterday across the five capital city markets.
