The data show that prices fell in the June quarter but at a slower pace than in earlier quarters. Prices were down 0.7 per cent in Sydney, 0.5 per cent in Melbourne and 0.7 per cent across the eight capital cities.
According to the ABS data, and in terms of the bet with Mr Locantro, here is the latest scorecard of peak to trough per cent changes:
Sydney -12.7 per cent
Capital cities -8.0%
For the weakest market, Sydney, a drop of 12.7 per cent over two years is below the run-rate required for Tony to win the bet. For Melbourne and the 8 capital cities, the price declines are well short of the speed needed to hit the 35.0 per cent plus price falls by the December quarter 2021.
Alas for Tony and in good news for my side of the bet, there is a raft of news on house prices since the end of the June quarter which are pointing to house prices rising. Most notably the Corelogic daily house price series and the weekly auction clearance rates are suggesting a buoyant housing market, at least in terms of price changes.
Both of these indicators are showing that house prices have started to rise in the September quarter. The Corelogic house price series shows that with less than two weeks lift in the quarter, prices are up approximately 2.5 per cent in both Sydney and Melbourne in the September quarter.
If these sorts of results are reflected in the next quarterly release from the ABS, the ‘hopes’, if we can call them that, of a 35 per cent fall in house prices by the end of 2021 will be so remote that to be fanciful.
More importantly, interest rate cuts are still impacting the housing market, as is the recent relaxation of credit conditions for potential borrowers. Fresh supply of new dwelling is about to plummet as the recent falls in building approvals dive which, in concert with strong demand from rapid immigration inflows, is also positive for prices.
While the finish line for the bet is still 2 and a half years away, it seems that 35.0 per cent house price falls are highly improbable and if anything, at the end of 2021, house prices will be higher than when the bet was made!
I wonder what Martin North and Tony Locantro will think of that when it happens?