The Abbott Government is cutting the Australian Bureau of Statistics budget by $50 million. A wide range of statistics will cease being collected.
On the list for review is the key measure of Australian property prices: the Residential Property Price Indexes: Eight Capital Cities (6416.0).
8 Capital Cities is based on land registry transfer data provided by the states. The ABS’ role in adding these together is very modest. The savings in ending the series are statistically insignificant.
It is 100 per cent accurate and the measure historians and economists will use to dissect The Great Australian Land Bubble after prices revert to mean. Patience everyone.
It is the key statistical base to Philip Soos’ eye-opening graph Australian Constant Quality Real Housing Price Index 1880-2012.
If 8 Capital Cities has a flaw, it is the delay of about five months caused by Australia’s long property settlements and the quarterly update to the ABS from Valuers General. I have called for upgrades here and here to this vital statistic, pointing out if agents advised the ABS of a transaction the day the deposit cheque clears (Sale +3) we would have a near-real time measure of house prices.
It can – and will – be argued there are private data providers ready to step into the breach, if users are willing to pay. Which misses the point.
Australia’s land is its largest and most important asset. Residential property, which includes buildings, is worth a staggering $5.1 Trillion. We all need access to land to prosper. An open and transparent land market depends on quality data accessible to all.
In fact, the good data provided by the ABS boosts buyer confidence and actually lifts land prices. Their absence after the Abbott Government’s cost-cutting can only reduce them. There. This may even be the pin that pops the land bubble.