ABS releases house price stats for the quarter: national growth falls to 3.5% y.o.y

Hopefully this is the right place to post. A few weeks ago I was discussing how CoreLogic's RP Data, which is based on a hedonic index as of April/May was still showing quite high price growth (in fact they have Sydney's growth at well over 13% and a five city aggregate at almost 10%) nationally. Hedonic indicies are easily manipulated and are pretty questionable for many reasons (e.g. they assign a subjectively calculated "value" to all houses in an area - ignoring whether they have been recently sold, renovated etc). The RBA dumped them as a data provider in August, saying they were overstating growth.

CoreLogic's growth was quite starkly at odds with Domain's much more muted data for Q3: Domain House Price Report – September | Domain – Product

And now, the ABS has released its Q3 results (which very closely match Domain's): 6416.0 - Residential Property Price Indexes: Eight Capital Cities, Sep 2016

Individual city results:

• [During Q3] The capital city residential property price indexes rose in Sydney (+2.6%), Melbourne (+1.7%), Adelaide (+0.9%), Brisbane (+0.2%), Canberra (+0.8%) and Hobart (+2.3%) and fell in Perth (-1.6%) and Darwin (-1.2%).
• Annually, residential property prices rose in Melbourne (+6.9%), Hobart (+6.8%), Canberra (+5.5%), Sydney (+3.2%), Adelaide (+3.2%) and Brisbane (+3.1%), and fell in Darwin (-7.2%) and Perth (-4.0%).

So if you own in say Sydney - if you read the widely reported CoreLogic RP Data you're up over 13% this year. However, by Domain and the ABS's reckoning, you actually up 2.1% or 3.2% respectively. (The RBA in their August statement of monetary policy found Residex's results also closely aligned with the ABS and Domain.) Given that inflation is a smidge under 2%, the difference between data providers is pretty concerning. It's also useful to note the ABS has shown a drop from 10.7% nationally last year, to 3.5% now.

Personally I think it's a good time to tread carefully, and be sure you're holding quality assets (and, possibly, have some capital set aside to buy after a possible correction).