The Australian Bureau of Statistics reports on housing prices quarterly using a stratified median methodology. This method is different to CoreLogic’s hedonic regression series; in simple terms, the stratification methodology measures price changes across a number of ‘strata’ or sub-regions before aggregating the data back to the capital city level. Generally the ABS and CoreLogic measures show very similar trends over time, however, the CoreLogic series is more timely (one day in arrears), higher frequency (monthly rather than quarterly) and provided across small regions as well as quartile and decile based valuation cohorts.
Overall, the ABS reported a 2.4% rise in residential property prices across the combined capital cities over the September quarter. In comparison, the CoreLogic index for the September quarter reported a 2.2% lift in capital city housing values over the same period of time. Across each of the state capitals, the ABS has reported a slightly stronger result on price growth relative to the CoreLogic index, while quarterly results for Darwin and Canberra were higher on the CoreLogic method.
The broad trends from the ABS mirror those already reported by CoreLogic more than two months ago. Sydney and Melbourne are leading the recovery trend with housing values up 3.6% over the quarter, with a softer growth trend across most of the smaller capitals while Adelaide, Perth and Darwin values drifted lower.
The ABS reported a 3.6% rise in Sydney housing values over the quarter compared with a 3.5% rise in the CoreLogic index. The growth trend is skewed towards houses (+4.0%) compared with the unit sector (+2.8%). Since the September quarter, the CoreLogic index has continued to gather pace, with November results showing Sydney housing values rose at their fastest monthly pace since 1988.
Housing values were 3.6% higher over the September quarter, according to the ABS, compared with a reported 3.4% rise based on the CoreLogic home value index results for the same quarter. The ABS shows very little difference in the performance of houses compared with units, with the quarterly results up 3.7% and 3.6% respectively. The two months following September have seen Melbourne’s rebound remaining strong. Based on CoreLogic’s monthly series, Melbourne dwelling values were up a further 4.5% over the two months ending November.
The growth trend across Brisbane has been mild compared with the rebound in Sydney and Melbourne. The ABS reports a 0.7% rise in Brisbane housing values over the September quarter, compared with a 0.5% rise based on CoreLogic data. Brisbane’s detached housing market has recorded a slightly higher quarterly growth rate relative to the unit sector, with values up 0.9% for houses and 0.4% for units. The October and November results from CoreLogic show the Brisbane housing market to be gathering some pace, with values up 1.6% in total over the most recent two months.
Adelaide’s housing market has been weakening since moving through a peak rate of growth in the December quarter of 2016 and slipping into negative price movements in the first quarter of 2019. The September quarter data from the ABS shows a subtle improvement in the rate of decline, with values down 0.3%, compared with a 0.6% decline reported by CoreLogic for the same period. The trends were similar between the broad product types, with house values down 0.3% over the quarter and unit values down 0.4%. The monthly data from CoreLogic showed Adelaide home values moving back into positive monthly growth, with values up 0.9% over the two months ending November.
The ABS reported further slippage in Perth home values, down 1.2% over the quarter compared with a 1.9% fall reported by CoreLogic for the same period. The ABS has reported a 1.0% rise in Perth unit values over the quarter and a 1.7% fall in house values. The monthly CoreLogic series has reported a further improvement in the rate of decline across the Perth market in October, followed by a month-on-month rise of 0.4% in November, suggesting the Perth housing market is likely moving through the bottom of what has been a very long downturn.
The ABS have reported a 1.3% rise in Hobart housing values over the quarter; a stronger result than CoreLogic’s index which was up 0.4% for the quarter. The rise in the ABS series was almost entirely attributable to higher house values (+1.5%) while unit values were relatively flat (+0.1%) over the quarter. The monthly updates from CoreLogic post-September have shown further strength in Hobart housing values, with the hedonic index up a total of 3.2% over the past two months.
Darwin housing values have been in decline since 2014, with the ABS reporting a further 1.2% fall over the September quarter, which was a slightly larger decline than the CoreLogic index, which was down 1.1%. The Darwin unit sector was the biggest drag on the market, down 2.6% over the quarter compared with a 0.6% fall in house values. CoreLogic has continued to report a fall in Darwin values over the past two months, however the quarterly rate of decline is showing an easing trend.
The ABS reported a 0.5% slip in Canberra dwelling prices over the September quarter, while CoreLogic figures were up 1.4%. Based on ABS data, the growth in Canberra home prices was a attributable to a 2.4% rise in unit values which more than offset a 1.4% fall in house values. Since September, CoreLogic has reported a further 2.2% lift in Canberra housing values, with the index up for both house and unit values over the most recent two months.
Differences between the indices can be explained by a number of factors. Although both index providers utilise the same source data (CoreLogic supplies the record level data that powers the ABS residential property price index), the methodologies for cleaning and filtering the underlying transaction data are likely to be very different, and there are also likely to be differences in how property types are derived (houses v units). Of course there are also the pure methodological differences with the ABS utilising a stratified median while CoreLogic prefers a hedonic regression series.
Despite the differences, its clear that over time both series show very similar trends. The housing market is clearly on a strong recovery path in the largest cities and growth is now rippling out to many of the smaller capital cities.