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The Sydney All Dwelling Index is teetering on 1M
Topic Started: 10 May 2016, 05:47 PM (9,335 Views)
Rufus
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If only we had the Shadow here to tell us when the Sydney all dwellings index will hit 1M.

It was 955 at the end of April and just 10 later it's registering 979

At that rate it could reach 1M by the end of the May.

http://www.corelogic.com.au/research/daily-indices.html

It was just 915 a short time ago.

Amazing.
Edited by Rufus, 10 May 2016, 07:43 PM.
Take risks - if you win you will become wealthy, if you lose you will become wise
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Strindberg
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Rufus
10 May 2016, 05:47 PM
If only we had the Shadow here to tell us when the Sydney all dwellings index will hit $1M.

It was $955 at the end of April and just 10 later it's registering $979

At that rate it could reach $1M by the end of the May.

http://www.corelogic.com.au/research/daily-indices.html

It was just $915 a short time ago.

Amazing.
The RP daily indices don't have dollar signs in front of them. Nor do they imply one index unit = 1000 dollars. Those indices don't even apply to a single property. They apply to the value of the whole portfolio monitored by Corelogic for that specific index.

However, the index is showing a rise of over 6% for that last rolling quarter.
Housing costs to Income broadly unchanged since 1994 - re-ratified here
The People of Australia have the highest median wealth in the World
2002-2012 10 year house price growth the SLOWEST since 1952-1962
"There are two kinds of people in this world: ones that fiddle around wondering whether a thing's right or wrong and guys like us." (Hugo to Gagin in Ride the Pink Horse)
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Terry
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Rufus
10 May 2016, 05:47 PM
If only we had the Shadow here to tell us when the Sydney all dwellings index will hit $1M.

It was $955 at the end of April and just 10 later it's registering $979

At that rate it could reach $1M by the end of the May.

http://www.corelogic.com.au/research/daily-indices.html

It was just $915 a short time ago.

Amazing.
You wouldn't want to use that kind of projection methodology on the iron ore spot price over P3W.

But that's who the suburbanites' minds work. They see a pattern and their imaginations' extrapolate it into the future. It can get even worse when you have frauds dressed in suits working for data companies and often appearing in the media. It's another variation on a puppet show.
Strindberg
10 May 2016, 05:56 PM
The RP daily indices don't have dollar signs in front of them. Nor do they imply one index unit = 1000 dollars. Those indices don't even apply to a single property. They apply to the value of the whole portfolio monitored by Corelogic for that specific index.

However, the index is showing a rise of over 6% for that last rolling quarter.
Good points. We need people like you to illustrate this. However, the index does not relate to a "portfolio". It represents the total housing stock.
Edited by Terry, 10 May 2016, 06:05 PM.
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Khaderbhai
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Wealthy Suburbanite

Terry
10 May 2016, 06:01 PM
However, the index does not relate to a "portfolio"
The index is calculated using price movements in the portfolio of properties that RP Data have visibility of.

But that 6% quarterly growth for Sydney was known about well in advance, based on the surge in auction clearance rates this year, and the strong correlation between auction clearance rates and house price growth. That solid Sydney price growth wouldn't be a surprise to anyone who watches the leading indicator - i.e. auction results.
Edited by Khaderbhai, 10 May 2016, 06:19 PM.
Banks can't repossess your home simply because the market value falls. Australia's Consumer Credit Code says consumers aren't liable for things ordinarily outside their control and can't be held to obligations that could only be met by selling their home. Click for details.

"The truth is that there are no good men, or bad men. It is the deeds that have goodness or badness in them. There are good deeds, and bad deeds. Men are just men."
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Strindberg
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Terry
10 May 2016, 06:01 PM

However, the index does not relate to a "portfolio". It represents the total housing stock.
Shit and Bollocks.

http://www.corelogic.com.au/resources/pdf/rismark/technical_method_paper.pdf

Quote:
 
The index calculation is in four parts (see Section 2.2 for details):
1. Price every property in the given category.
2. Form a portfolio of properties which represents the index from the category.
3. Calculate the change in value of that portfolio over the subsequent period ie. 1 day.
4. Multiply the previous index value by the relative change in portfolio value.
Housing costs to Income broadly unchanged since 1994 - re-ratified here
The People of Australia have the highest median wealth in the World
2002-2012 10 year house price growth the SLOWEST since 1952-1962
"There are two kinds of people in this world: ones that fiddle around wondering whether a thing's right or wrong and guys like us." (Hugo to Gagin in Ride the Pink Horse)
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Terry
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Khaderbhai
10 May 2016, 06:16 PM
The index is calculated using price movements in the portfolio of properties that RP Data have visibility of.

But that 6% quarterly growth for Sydney would have been known about well in advance, based on the surge in auction clearance rates this year, and the strong correlation between auction clearance rates and house price growth. That solid growth in Sydney wouldn't be a surprise to anyone who watches the leading indicator - i.e. auction results.
Yes, but it's not a "portfolio". It's the population of houses sold, which is weighted by sales price and composition attributes.

The only way to use clearance rates as a "predictor" of the index is to run a linear regression with the index as the dependent variable. That model wouldn't make much sense given that the range in the independent variable is limited. It would require quite a number of independent variables to give test if the model has any validity.
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Khaderbhai
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Wealthy Suburbanite

Terry
10 May 2016, 06:29 PM
Yes, but it's not a "portfolio"
RP Data Corelogic disagrees with you. Maybe you should tell them you know more about their index than they do. :re:

Quote:
 
The only way to use clearance rates as a "predictor" of the index is to run a linear regression
That's the only way you know how to do it, but the rest of us aren't so limited in our abilities.
Edited by Khaderbhai, 10 May 2016, 06:34 PM.
Banks can't repossess your home simply because the market value falls. Australia's Consumer Credit Code says consumers aren't liable for things ordinarily outside their control and can't be held to obligations that could only be met by selling their home. Click for details.

"The truth is that there are no good men, or bad men. It is the deeds that have goodness or badness in them. There are good deeds, and bad deeds. Men are just men."
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Terry
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Strindberg
10 May 2016, 06:28 PM
You are not reading the technical paper in full. Start with the basics about how the index is calculated.

1. Price every property in the given category.
2. Form a portfolio of properties which represents the index from the category.
3. Calculate the change in value of that portfolio over the subsequent period ie. 1 day.
4. Multiply the previous index value by the relative change in portfolio value.

The concept of the "portfolio" was in preparation for an exchange-traded instrument.

The All Dwelling Index is a weighted index of housing and unit indices weighted to the total housing stock reported in the Census.


Khaderbhai
10 May 2016, 06:32 PM
RP Data Corelogic disagrees with you. Maybe you should tell them you know more about their index than they do. :re:


No, I agree with them. The indices are their creation. In their own words:

The All Dwellings indices are a stock weighted average of the corresponding House and Unit indices.

Additionally, we calculate “All Australia” composite indices. The daily Australian series for ASX trading are stock weighted averages of the corresponding 5 daily city indices and are calculated chiefly for trading purposes. We also extend this to stock weighted averages of the corresponding 8 city indices described in the previous section.
Edited by Terry, 10 May 2016, 06:50 PM.
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Khaderbhai
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Wealthy Suburbanite

Terry
10 May 2016, 06:47 PM
2. Form a portfolio of properties which represents the index from the category.
3. Calculate the change in value of that portfolio over the subsequent period ie. 1 day.
4. Multiply the previous index value by the relative change in portfolio value.

The concept of the "portfolio" was in preparation for an exchange-traded instrument
It's all based on the same data - i.e. RP Data's portfolio.

Anyway, it's fun to look back at the Sydney Auction Results thread and note all the members, and several mystery guests, who predicted exactly this price growth result several months ago, based on the auction results. At the time you said it was impossible for them to make such predictions ("regression blah blah blah").

But make predictions they did. And their predictions were right.

The fact that they did it, proves that it's possible to make accurate predictions without running linear regressions.

Or in other words, you were wrong again.

I wonder how much money some of those people made on the back of their excellent forecasting ability?

Did you make much money during the same period by faffing around with linear regressions?
Edited by Khaderbhai, 10 May 2016, 07:02 PM.
Banks can't repossess your home simply because the market value falls. Australia's Consumer Credit Code says consumers aren't liable for things ordinarily outside their control and can't be held to obligations that could only be met by selling their home. Click for details.

"The truth is that there are no good men, or bad men. It is the deeds that have goodness or badness in them. There are good deeds, and bad deeds. Men are just men."
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Rufus
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Strindberg
10 May 2016, 05:56 PM
The RP daily indices don't have dollar signs in front of them. Nor do they imply one index unit = 1000 dollars. Those indices don't even apply to a single property. They apply to the value of the whole portfolio monitored by Corelogic for that specific index.

That's quite true, but the house price index shown in the monthly data almost mirrors the median house price, so it's a de facto median price of sorts.

http://www.corelogic.com.au/research/monthly-indices.html
Take risks - if you win you will become wealthy, if you lose you will become wise
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