Yes, I am talking about the RP Data / Rismark hedonic indices, and yes you (and Rory Robertson) are wrong, particularly about the lag.
The SQM newsletter is a subsciption, but the findings are discussed on http://australianpropertyforum.com/topic/9904917/1/ where the following is outlined (with graphs), among other sources.
Please read it. I'll remind you again that I was not attempting to discredit the data, but pointing out their acknowledged volatility and lack of seasonal adjustment. I'd also reiterate that I do not think it's unreasonable for Domain to make those caveats clear (when printing their press releases as Domain did in the link at the top of this thread).
Louis Christopher "I thought I might share with you something you really ought to know - the lag times between a property selling and its transaction record ultimately making its way to the various data reporters via the various state land title offices.
It has a direct bearing on the compilation and timeliness of various house price series to the point that preliminary data is just that - preliminary data. And, whether we like it or not, revisions in house price indexes are absolutely vital. Of course, I think it also proves that unrevised daily house price indexes are in no way more accurate than throwing darts at a dartboard.
The underlying data of the below charts comes from the various land titles offices around the country. It was updated and sent to us on the 3rd of June 2013 and represents all records that came from the state land titles offices during the month of May. The charts represent effectively a distribution curve of lag times between the date a property was sold at contract (exchange date) and the date the record was sent from the land titles office.
Average lag for NSW is 110 days, for Queensland 91 days, and for Victoria 221 days!
I don't think this fact makes the RP Data index any less useful, as long as we understand what it is telling us. Two of the other index providers, ABS and APM revise their quarterly results over the following two quarters, so for both of those providers we still need to wait for 6-9 months for their final results.
Residex don't revise their monthly index, which is primarily based on a 'repeat sales' methodology, but it must suffer from the same limitations as the RP Data index - i.e. their monthly report can't possibly include all sales for the previous month. Whether or not they incorporate the lagging results from earlier months when calculating their latest monthly figures, I don't know.
Anyway, this lagging effect explains why the RP Data index was not surging over the past two months, when the other indicators like auction clearance rates, housing finance growth, and anecdotal evidence were suggesting near boomtime growth rates. It is very likely that the RP Data index will surge over the following few months, as those lagging sales results from the past few months start to come in."
