RBA gets housing wrong again as market booms

In The AFR I highlight how Australia's 3.5 year long housing boom---exemplified by the Sydney and Melbourne auction clearance rates soaring to 86% and 76% respectively on the weekend---is once again humiliating the RBA, which is losing credibility every time it cuts rates on the claim housing conditions are cooling or under control when this is not remotely true. Following the August cut the RBA told the community that: "dwelling prices have been rising only moderately over the course of this year" (wrong); "housing prices declined in most capital cities in July" (wrong); "auction clearance rates ... [are] lower than a year ago" (wrong); and "the likelihood of lower interest rates exacerbating risks in the housing market has diminished" (wrong). The RBA also fabricated a completely BS reason as to why it suddenly junked its preferred daily "hedonic" house price index for its previously non-preferred, and much more prone to bias, "stratified median price" index. Check out my chart showing how Australia's house price-to-income ratio has hit a new record high of 5.7 times. Free (VIEW LINK)