About the RMX
The REIV Residential Market Index (RMX) is a residential property price index (RPPI) designed to provide a current, simple insight into real property price trends in Victoria. An RPPI measures the price change of the stock of residential dwellings over time.
The RMX index rose by 0.7 per cent to 148.1 as the House index saw a 0.8 per cent increase to 157.9 and the Unit index rose higher by 1.2 per cent to 134.4. This is the fourth consecutive week of growth for both the RMX index and the House index as the indices started September with positive results. The ABS reported that building approvals for houses fell in July in Victoria compared to the previous month. Victoria was one of only two states to show falling house approvals, with the lower supply potentially pushing house prices and the House index higher throughout the rest of 2024.
Why use a Residential Property Price Index?
There are several areas where RPPIs play a role. Because of the importance of the housing market in the Australian economy, RPPIs are of interest to policy makers, market analysts, researchers, and home buyers and sellers for a range of economic and social reasons. They can be used as a macro-economic indicator of economic activity, for use in monetary policy and inflation targeting, and as an input into the Consumer Price Index.
The REIV team developed the RMX as a more frequent, alternative measure to quarterly medians so members can access the latest price movements as they happen.
Medians or RMX?
Both measures have a role to play in understanding the property market. While the medians are an indicator of sale price during a period, the RMX is a measure of price movement over time.
A limitation of medians and simple median indices as measures of price change is that the properties used to calculate a median are only those traded during the period in question. This comparatively small number of properties are not always representative of the total stock of housing. Changes in the mix of properties sold during a period will therefore affect the sample median price much more than the overall median price of the housing stock. For example, if more higher-end houses sell this quarter than last, the median price will rise regardless of whether that reflects what is going on in the wider market.