Australia’s housing price index likely accelerated sequentially in August

Momentum in Australia’s residential real estate market has regained in recent months, particularly since the Reserve Bank of Australia returned to easing of policy in May 2016, said Societe Generale in a research note. Auction clearance rates have been rising, whereas price inflation has also accelerated.

But there is certain argument regarding the degree to which prices have increased. Certain private sector, higher-frequency indices have implied that prices are accelerating even in year-on-year terms, stated Societe Generale.

CoreLogic, which is the most broadly followed private sector survey, indicates a sharp reacceleration; however, other private surveys show a less dynamic scenario. The official comprehensive residential property price index is likely to hint at a marked strengthening in quarter-on-quarter terms, according to Societe Generale.

“Our forecast of 4.5 percent qoq is more than twice the mean and median gains over the past 11 years (2.1 percent and 2.0 percent, respectively) but would still imply a slight 0.2pp slowdown in the annual rate”, added Societe Generale.