❓ Dr. Nahan questions the Treasurer on the methodology used to forecast Perth median house prices and property transactions. The Treasurer provides a general overview of the data sources and factors considered in the forecasting process.
AnsweredQoN 4919Legislative Assembly
QuestionView source ↗
I refer to the answer to Question on Notice number 4751 and I ask: (a) Will the Treasurer explain the methodology used to forecast Perth median house prices including assumptions and information sources; and (b) Will the Treasurer explain the methodology used to forecast property transactions including assumptions and information sources?
AnswerView source ↗
Answered
7 May 2019
Response time
10 days
(a) Treasury uses historical quarterly Perth median house price data published by the Real Estate Institute of Western Australia (REIWA) as the basis for tracking growth in Perth's median house price. The median house price for the current financial year is informed by both actual data, lead indicators, industry liaison and judgement. Over the forward estimates, price growth is forecast based on projections of property transactions and recent levels of house prices.
(b) Treasury uses housing finance data published by the Australian Bureau of Statistics (ABS) to derive a proxy of the level of property transactions. For the current financial year, property transactions are estimated using actual data for the available quarters and a projection for the remaining quarters of the financial year informed by analysis of recent trends and seasonal patterns in the series, leading indicators, and consultations with the property industry. Over the forward estimates, growth in property transactions is forecast based on projections of income, relevant population cohorts and an indicator of the business cycle. Sources of data and general market information include Landgate, the Office of Sate Revenue, REIWA, the Australian Bureau of Statistics, the Housing Industry Association, the Master Builders Association and the Reserve Bank of Australia.
(b) Treasury uses housing finance data published by the Australian Bureau of Statistics (ABS) to derive a proxy of the level of property transactions. For the current financial year, property transactions are estimated using actual data for the available quarters and a projection for the remaining quarters of the financial year informed by analysis of recent trends and seasonal patterns in the series, leading indicators, and consultations with the property industry. Over the forward estimates, growth in property transactions is forecast based on projections of income, relevant population cohorts and an indicator of the business cycle. Sources of data and general market information include Landgate, the Office of Sate Revenue, REIWA, the Australian Bureau of Statistics, the Housing Industry Association, the Master Builders Association and the Reserve Bank of Australia.
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