Every month a national home value index lands, and every month it gets reported as one number: values rose or fell by some fraction of a per cent. If you are deciding whether to list, that number is close to useless on its own.
The release it comes from is long, and the useful parts are further down. Here is how to read it.
Read the quarter, not the month
Monthly movements are noisy. A single month can swing on the composition of what happened to sell, and a fraction of a per cent either way is well inside the margin where nothing has actually changed. The rolling quarterly figure smooths that out and shows direction, which is what matters when your campaign will run for six weeks and settle six weeks after that.
It is normal for the quarterly and monthly figures to disagree. When they do, the quarter is the one to trust.
The national number hides the market you are in
A national index is an average of capitals moving in different directions at different speeds, plus regional markets running their own cycle again. It is entirely routine for one capital to be falling while another posts its strongest quarter in years, and for the national headline to print flat as a result.
Every release breaks the figure down by capital and by rest-of-state. Skip the headline and go to that table. Then keep going: even within one city, the movement in a growth corridor releasing new estates looks nothing like an established suburb three houses come up in each year.
Supply and sales volumes tell you more than price
Two numbers further into the release are better predictors of your campaign than the price line.
| What to look at | What it tells you |
|---|---|
| Advertised stock (total listings) | How much choice buyers have. Rising listings means less leverage for vendors, whatever prices did last month. |
| Sales volumes | Whether buyers are transacting or only looking. Falling volumes with rising stock is the softest combination there is. |
| Auction clearance rate | The fastest-moving confidence signal, though it only describes the auction segment. |
| Median days on market | Confirms the above a few weeks later, and is the number that decides your price strategy. |
Listings and sales volumes move before prices do. When listings climb through spring and sales volumes fall against the same time last year, selling conditions have softened regardless of what the price index printed, and the price index will say so a quarter later.
Watch the direction of the commentary
Most releases carry a line or two from the research director explaining what changed. That commentary is where a turning point usually shows up first, because it names the markets that have started losing momentum before the numbers are large enough to register in the headline.
What it cannot tell you
An index measures a market. It does not measure your property. It knows nothing about your renovation, your aspect, your street's traffic, the development application next door, or how many buyers missed out on the last comparable home in your suburb and are still looking.
That last point is the one that most often moves the price, and no national release contains it. It sits with the agents fielding the enquiry. If you want to know what a slowing market means for your address rather than for the country, a local appraisal is the number to get.
