Australia’s house price inflation decelerating in aggregate, says Societe Generale

Australia’s house price inflation is likely to have slowed down in aggregate; however Sydney house prices are expected to have rebounded. The Australian property market is currently quite ambiguous. Indeed, there is a high degree of divergence, with the capital cities of the mining states witnessing continued declines; however, Melbourne and Canberra are recording solid gains.

The Official data from the Australian Bureau of Statistics are mixed, with sequential falls in the fourth quarter of 2015 and the first quarter of 2016 and then a strong rebound in the second quarter. Higher frequency data imply that prices continued to increase in the third quarter; however, then there has been an unusually large divergence between certain private sector data and the ABS figures. The private sector data showed 8.6 percent year-on-year in the second quarter, whereas ABS figure showed less than half of that at 4.1 percent.

“Hence, although the RP data indicate a mild slowdown to 8.2 percent in 3Q, we expect a small rebound in the ABS data to 4.2 percent”, said Societe Generale in a research report.

At 12:00 GMT the FxWirePro's Hourly Strength Index of Australian Dollar was bullish at 95.6584, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -49.3491. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex