Daily data needs to be taken with a grain of salt and looked at in context, according to treasurer Wayne Swan.
When looking for trends, while data is essential for viewing the economy and making financial decisions, fluctuations in the daily figures “can only tell you so much”.
“Barely a day passes without the release of an indicator measuring one part or another of the Australian economy,” Mr Swan recently said in his ‘Treasurer’s economic note’.
Instead, he looks to firsthand accounts to get ahead of the curve, fill in the gaps and often notice trends before the data picks up on them.
“These have come from talking to people from right across the country: managers of businesses large and small, community leaders, and industry representatives, as well as the employed, the unemployed and the retired,” he said.
However, while daily records cannot be relied upon to tell the whole picture, RP Data said that their Daily Home Index allows for a much more accurate depiction of the housing market’s value changes.
“As Australia’s most valuable asset class, accounting for around 60 per cent of Australia’s major banks’ balance sheets, it is important to have the best possible measurement of housing returns and rental yields,” RP Data director, Tim Lawless, said when the index was initially released.
“The new method for calculating capital movements provides a significant step forward in understanding housing market conditions across Australia.”
Research using a combination of both daily and long-term indicators, as well as speaking with experts, is best-placed for an understanding of the movements of the housing market and economy.