Have all the recent house price rises been "seasonal" (charts)?

This is an important question. The short answer is no. In "actual" terms (ie, the prices people see in the market), the turn-around in the housing market has been extremely sharp. As I have mentioned before, national home values look like they will be up more than 1% in the month alone when RP Data-Rismark release their broader "8 capital city index" on Tuesday at 10am (the five capital city index is publicly available for download via Bloomberg). Actual capital gains in Australia's two biggest cities, Sydney and Melbourne, have been stronger again and appreciated at double-digit rates over the last three months.

So here's a key question: what would a seasonally-adjusted version of numbers look like? Applying a standard seasonal-adjustment method to RP Data-Rismark's five capital cities index does not remove the growth. While there has certainly been some seasonal recovery in recent months, less than half a percentage point of the circa three percentage point increase in the Australian five capital city index over the last four months can be explained by seasonal factors. Similarly, the September month numbers still look very strong after you remove seasonal influences.

One final thing I would draw your attention to is the increase in Australian LVRs reported by the RBA. I highlighted this in my AFR column on the weekend (see chart below). It is pretty amazing that nearly 40% of all owner-occupied home loans are approved with LVRs greater than 80%. But what is more remarkable is that 17% of all home loans currently being approved have LVRs greater than 90%. I guess that's okay when house prices are rising...