Sydney market’s frenzied day 1 response

They don't. The methodology Standtall posted very clearly states they use sales data up to a year old, and it also clearly states the data can be skewed by large sales during low volume periods. It's a good index for looking at a trend over time but there is absolutely no chance whatsoever this data has to do with the election. It was nothing more than amusing timing.

 

Read the methodology. It takes data up to 360 days old and very specifically explains in detail why data spikes occur, for the exact reasons I outlined above. It is literally impossible this data has anything to do with the election.

 

Look mate, its not that simple. I know you are confusing it with the methodology to calculate suburb medians. It's a common mistake and you are not the only one making it!

While I have explained the methodology before in other threads, I am doing it again for anyone keen to understand.

Corelogic daily index is a hedonic regressive index which means it aims to calculate the value of an asset based on certain features on an ongoing basis.

Lets take the example of a house. Corelogic has identified a handful of features that determine the value of a dwelling including land size, internal area, bedrooms, bathrooms, distance to amenities, location, street size etc. etc. Now they match it with sale data and rent data, asking computer models to predict dwelling value on a range of these factors. Asking prices, advertised rents and then final contract prices are all fed into it and the model keeps improving itself as it gets more and more data.

For every house in Australia (if a house has changed hands in recent history), Corelogic will always have an up to minute value (while they don't refresh in real time in retail subscription I believe). Lets say a top of the market property in Castle Hill is listed for sale with suburb median currently at $1.4m and the house had an existing valuation of $3 million, if it gets sold for exact asking price, Corelogic model simply thinks that market has not moved and this sale will have no affect on the value of any other house or the index despite being a large sale.

Corelogic daily index will only go up if sales/rental data it is capturing is indicating sale/rental prices exceeding current values model has calculated and the vice versa.

Why is it called an index? because it's a sum total of the values of all the houses in Australia on a given day.

It also has safeguards to ignore outliers, block sales and time relevance (i.e. a neighbouring sale last week is more predictive than the one a year ago).

Hope this makes sense!

 

They use agent data. In new south wales, agents will mark the listing under contract as soon as they have an exchanged contract and Corelogic will capture the price. It obviously gets confirmed at settlement date.

QLD is a whole different mess as you would know and it makes QLD data a bit slow to filter through.

 

Update: Today's Corelogic daily data is down 7 percent points from yesterday but we are still 41 base points higher than pre-election levels.

A whole week worth of data should give us a much better picture post elections.

 

All you've done is explain the type of index, which I already understand. There is no "up to the minute" valuation; that's not how it works. It very specifically says in their methodological papers that they use historical sales data up to a year old. The algorithm is updates on a daily basis, and valuations are a small part of this. They do not use "agent data". That is nowhere in their very detailed methodology. They list all the hedonic variables they use and the specific calculations applying to each. Their time series splits over 30 days, which is basically the minimum for the observed sales data component, though asking prices are also input. I mean there isn't someone on the phone calling all agents asking for updates on the previous weekend. That just isn't how the index works. It also isn't feasible. Contracts don't take that long to form, offers aren't instantly accepted. This result has nothing to do with the election.

 

Standtall need to move to stock market where index ticket over in real time with real number

properties is a long term game, daily number play no role in its direction or sentiment
as far as I know there is no such thing as daily properties index, whatever they use there are no proper tracking mechanism, in order to do that you need something like a stock market mechanism where all properties contracts exchange value in a certain area or Australia are known in real time and they aggregate and work out the index movement

 

Ok... Ok... I made a typo, it happened on 21/12/2018 and 19/01/2018 so my statement is still valid.

2018-12-23 158.77
2018-12-22 158.79
2018-12-21 158.93 - 0.42
2018-12-20 159.35
2018-12-19 159.42

2018-01-20 172.02
2018-01-19 172.05 - 0.45
2018-01-18 172.50
2018-01-17 172.51
2018-01-16 172.51

I work in IT sector... I know that many systems have 'data reconciliation' processes that review any missing past data from time to time and adjust transactions / balances / stock / sales / etc. As it is incorrect to adjust the data retrospectively (because they already reported it) they just issue 'adjustments' (compensating transactions'). One day data is completely meaningless.

 

I think you are more interested in being right than being factually correct. You can believe in whatever you like! Cheers

 

More importantly
APRA flinged.

APRA changes ?

 

Seems like they're just allowing it to move with interest rates, which makes sense, it would be stupid to do otherwise. If the assessment rate stayed at 7% when interest rates went either up or down it could create a disaster. The actual assessment rate seems like it'll stay mostly the same on current rates but may go up for some, down for some, neither here nor there really. Sensible move in the long run.

 

Really?
Please correct me im may have got this wrong.

So PPR loans can be had for 3.79 +2.5 = New assessment rates = 6.4% 20 odd percent difference.

For a coupe trying to buy and are currently approved for $1.4 million What change will it make ? 100k or 200k.

So now a suburb with that median will see much more competition and bring a floor and may start creating a reverse trend.

Also assume another 2 cuts priced in this will drastically change borrowing capacity for ALOT (not all)

 

Another positive for Sydney index today and Melbourne has joined in with 18 percent points increase today. Surely these are just one off fluctuations @highlighter ?

On the ground things haven't looked better in last 3 years.

West Pennant Hills was one of the worst hit suburbs with 10-15% price decline and very low turnover. Here are 3 sales over last two days:

20 Grangewood Place, West Pennant Hills, NSW 2125 - $1.74m
17 Blacks Road, West Pennant Hills, NSW 2125 - $2.6m
32 The Glade, West Pennant Hills, NSW 2125 - $1.54m

17 Blacks road property sold $650,000 over RP data valuation and vendors were expecting around $2m. Other two properties have achieved close to 2017 peak prices.

Enjoy!

 

This one: 16 Severn Vale Drive, Kellyville, NSW 2155

Sold is 48 hours for $1.3m - single level house in Kellyville (not even close Metro, 2 km walk)

 

From standtall, to my blog (attributed, I should say), to the Fin Review...



The news flow starts at Property Chart )

On a serious note, all the best analysis of lending changes stems from the brokers on this chat forum: bravo everyone.

 

Absolutely!

By the way, discovered a few other interesting sales today.

203/9-11 Rangers Road, Neutral Bay, NSW 2089

Sold for $3.375m today. It was first listed August last year with expectations of $2.575m but they failed to attract a buyer until today when someone was happy to pay well over last years asking price.

(Will post more tomorrow but it seems like election outcome has had quite a mind boggling effect on some cashed up buyers who are now willing to pay top premiums)

 

it is funny you say that, I saw exactly the same sale and was like...wtf...as I have a mate looking to sell in Neutral Bay. Crazy

 

Out with the FONGO and back to the FOMO.

 

They definitely overpaid. Would say that price was OTT even at the peak of the market in 2017, let alone now. Must be some (overly) cashed up downsizer.

For $3.4m, I'd rather pick up a decent freestanding house in Mosman!!

 

It's scary when you realise how most of investing decisions are driven by nothing but just pure greed and fear!