Charting a housing flatline

Australian home values stopped falling in 2012, marking a change from the deflationary conditions that prevailed last year, and a far cry from the 20-40 per cent fall predicted by some.

The new daily house price index launched by RP Data and Rismark in concert with the ASX affords some timely insights into the latest market dynamics. Based on the daily index values through to March 27 (inclusive), we can arrive at several insights.

First, Australian home values stopped falling in 2012 and look to be treading water. During the first three months of the year, dwelling values across the eight biggest Australian cities are, on average, unchanged. Drilling down into more detail, home values declined during the seasonally tepid month of January, but have recovered these losses in February and March.

You can see from my first chart below that once the end-2011 'high watermark' was reclaimed in the third week of March, Australian home values have tended to track sideways. (Note that the resolution of the y-axis in the next two charts has been boosted to make it easier on your eye: while the changes look large, they are, in truth, small.)

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