Property Market Future Recovery Signal Generated

The S&P /ASX 200 A-REIT (Australian Real Estate Investment Trust) Index has generated a recovery signal for commercial/industrial/retail property. The index completed a price correction that started in July 2016 in November 2018 and will now rise for some time to complete its cycle from its GFC low in March 2009.

This has an implication for Australian residential property. When the S&P /ASX 200 A-REIT completed its correction in August 2011 Australian residential property (as measured by the CoreLogic All Dwellings Five Capital City Index) continued to fall until May 2012, a lag of nine months. In a similar fashion the ABS Residential Property Price Index - Weighted Average of Eight Capital Cities continued to fall unit the December 2011 quarter, a lag of only a few months. A similar situation should now play out. That is, dwelling prices will continue to fall while the A-REIT rises but dwelling prices will bottom and then start rising. When the recovery start and what it will look like are the interesting questions.

 

I remember few months ago there were predictions of housing market turning around based on Google search data, apparently it had been very accurate previously, we all know how that turned out.
House prices? Let me google that for you

 

I’m sorry, until regulators, banks, government etc all do something about credit (easier to get money) I just can’t see housing recovering.

For all those supply and demand supporters out there I always say, the demand for housings there, but the supply of credit is not.

 

@Redom, @standtall - see original post by @kitdoctor.

Picked the turnaround impeccably ... back in January ... based on technical analysis of A-REIT performance. This being a forward-indicator of a turnaround in residential property.

Although at the time of this post the pending Federal election and potential of major tax changes had a quite a bearing driving property sentiment.

 

Is there an updated chart with new labellings?
What is the wave 5 circled projected target?

Thanks,
FXD

 

Is A-Reit performance being driven by residential performance but? I wouldn't have thought so.

 

I thought I'd revisit this thread from January 2019 where I put forward the idea that the A-REIT could be used as an indicator for the fortunes of the residential property market and that it had given a signal that a turnaround was approaching.

The A-REIT completed a fourth wave correction on 5 November 2018. Based upon what happened last time I put forward that about 9 months later or around early August 2019 the CoreLogic All Dwellings Five Capital City Index should turn upwards. Looking at the data there was a decisive turn upwards in mid August. This can clearly be seen in the chart.