The Challenge: Many firms lack consistent models and up-to-date data that fully account for economic trends and important variables that drive market and property values. As a result, they may underestimate or overestimate residential property valuations. Moody’s Analytics solves this problem by producing forecasts based on the market-leading CoreLogic Hedonic Home Value Index, under normal and stressed scenarios.
The Solution: Trusted Forecasts of Residential Properties Based on Market-Leading Source
Relied upon by the industry as the most up to date and accurate measurement of housing market performance, CoreLogic Hedonic Home Value Index uses a market-leading hedonic methodology that calculates values based on statistical modelling of key property characteristics, at different time periods, and then compared. This approach offers a more accurate view of residential property values.
Using CoreLogic’s hedonic indices as a basis, Moody's Analytics applies extensive econometric modeling expertise to produce forecasts of residential properties for Australia at the capital cities, rest of state level.
Forecasts are fully informed by national and regional analytics, accounting for interrelationships among all sectors of the economy, including per-capita income, production, spending, financial, and labor markets. The resulting baseline forecast represents the estimate of the most likely path for residential prices through the current business cycle.
In addition to the baseline forecast, The CoreLogic-Moody’s Analytics Australian Forecast Home Value Index allow clients to examine how different types of shocks will affect the future performance, by simulating the path of house prices under a range of economic scenarios. Client can leverage these alternative scenarios for "what if" analysis and stress testing purposes. Understanding the future path of house prices in relation to economic stresses such as oil price shocks, financial market distress, and other economic scenarios, is critical for strategic planning and risk management.