The National Cordell Housing Index Price (CHIP) Index rose by 1 per cent over the three months to March 2020, and 3.6 per cent year-on-year. 

Over the previous quarter, growth in the CHIP index was slightly lower at 0.9 per cent.

Meanwhile, the most recent figures show the national CPI increased by 0.7 per cent over the December 2019 quarter, compared to a rise of 0.5 per cent over the previous quarter. 

At a Glance:

• The National CHIP Index rose by 1 per cent over the three months to March 2020, to be 3.6 per cent higher over the year.
• Growth in the national CHIP index over the previous quarter was slightly lower at 0.9 per cent.
• The NSW CHIP Index increased by 0.9 per cent over the March 2020 quarter, after increasing by 0.8 per cent in the December quarter.
• The CHIP index for Victoria rose by 1.0 per cent over the March quarter of 2020 after the previous quarter recorded a growth rate of 0.8 per cent.
• Quarterly and annual growth in the Qld CHIP index was the highest of all states, rising by 1.1 per cent over the three months to March 2020.
• The CHIP index for WA increased by 1 per cent over the 3 months to March, up from 0.7 per cent over the December 2019 quarter.
• Quarterly growth in the SA CHIP Index was recorded at 1 per cent over the three months to March, up from 0.7 per cent over the previous quarter.

COVID-19 will likely have some influence on the movement in the CHIP index due to factors such as the availability of labour, and price of materials.

At this stage it is a little too early to see what impact it will have, but it is more likely to be a deflationary movement, as a surplus of labour becomes available while the commencement of new projects slows. 

The most recent ABS data (trend series) shows total dwelling approval figures increased by 1 per cent in February, while employment in the construction industry grew 0.2 per cent over the three months to February 2020. 

Construction currently accounts for around 9.1 per cent of the total workforce.

The ABS have noted on both the building approvals and labour force datasets that they are currently monitoring for potential impacts from the coronavirus so again this will be something to watch. 

CoreLogic’s home value index released in April saw national dwelling values rise by 0.7 per cent over the month of March.

It is worth noting the second half of the month experienced weakening in the growth trend as confidence slumped and social distancing polices took effect.

Buy CoreLogic's CHIP report here

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