RBA relying on 'moronic' data: SQM

by Adam Smith18 Apr 2012

SQM Research has lambasted the RBA for suggesting that house prices have stabilised, saying the bank was relying on "moronic" data.

In the minutes from its April board meeting, the Reserve Bank claimed house prices had showed signs of stabilising, while auction clearance rates in Sydney and Melbourne had picked up. SQM Research managing director Louis Christopher rubbished the claim, and said he was "deeply concerned" by the RBA's assertions.

"Let me tell you now, house prices have not stabilised. In many parts of the country, they are still falling. And auction clearance rates are weaker than recorded this time last year," he said.

Christopher said a recent uplift in clearance rates was seasonal, and chided the Reserve Bank for failing to note this.

"The RBA should typically know this, and yet are still suggesting that there is stabilisation in the market. Well, not for Melbourne, and not for Sydney, and not for Canberra, and not for Hobart, and there are still some question marks on Brisbane and there are still no signs of the Gold Coast or Sunshine Coast coming out of their property crash," he said.

Perth and Darwin, Christopher suggested, are the only cities to have experienced a "genuine bottoming out". He warned the RBA against relying on what he characterised as unreliable housing data.

"I can only hope that the RBA is not relying on daily house price indexes that moronically suggest that Melbourne house prices rose 1.8% in January, or relying on certain commentators who have suggested deceitfully that auction clearance rates are in genuine recovery when clearly they are not," he said.