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MAKING NEWS
Tue, 27 December 2011 A sunny summer for housing The closely-watched RP Data-Rismark house price index results for the month of November will be released on Friday, and should afford some powerful insights into the market's positioning following the first RBA rate cut.
November is an important month since it is normally the last of the year in which we get healthy sales volumes until the selling season begins again in February (with the exception, perhaps, of beachside properties). December and January can be more difficult to interpret given the paucity of transactions.
Some economists and commentators believe that the housing market is set to endure more pain in 2012. I don't subscribe to that view, and have argued for over a year that the housing market will be a good hedge against adversity in the event the RBA slashes cuts, which it has felt compelled to do.
I've also said for a while now that there are partial indications that the housing market is beginning to stabilise, and – with the benefit of two fully-passed-through RBA rate cuts in November and December, which, I would point out, no economists forecast at the start of 2011 – should bounce back with surprising elasticity during the first quarter of 2012.
Notwithstanding some analyst confusion interpreting the ABS housing finance flows, the fact is that the most valuable ABS series, the seasonally-adjusted number of new home loans approved for the purchase of existing dwellings, has been rising strongly since March this year.
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