Australians' Search Activity Suggest House Prices Could Soon Stabilise
CoreLogic data reports that the Australian home prices have fallen for 11 months, resulting in a 2% decrease in values over the past year.
While many suspect that these trends will continue in the future, Australians have demonstrated their passion for property as they love owning it, buying it, watching TV shows about it and particularly recently, keeping up-to-date on specific markets, specifically new listings.
ANZ Bank’s Housing Search Index, an indicator that uses data from Google Trends to aggregate internet searches related to searches related to house buying, reports that search activity has begun to pick up from lows seen earlier this year.
This suggests prices may begin to stabilise towards the end of the year; according to historic patterns and modest improvements in other housing indicators.
“The index suggests that while there is still more pain to come over the coming months, house prices are set to stabilise towards the end of this year,” says David Plank and Giulia Lavinia Specchia, members of ANZ’s Australian economics team.
CoreLogic data shows the bank’s Housing Search Index overlaid against quarterly movements in Australian home prices.
Chief Australia and New Zealand Economist at Capital Economics Mr Paul Dales said, “After seasonally adjusting the 0.4% decline in house prices in August on the eight capital cities measure to take into account the normal improvement in price trends ahead of the spring selling season, prices fell by 0.6%."
“As that was the same as the 0.6% decline in July, there has been no let-up in the pace at which prices are falling.”
So even though prices fell at a slower pace in nominal terms last month, given seasonal trends seen in the past, the decline was still large when adjusted to historic patterns.
Particularly in Sydney and Melbourne, as shown in a past blog post and explained further by Dales.
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