Am just wondering about discrepancies I'm finding when researching the average prices of houses in one particular suburb over the past 12 months. API say increased by 13% RP Data say increased by 11.9%
Similar enough, BUT the big discrepancy comes from the rate given by the local REA's I spoke to: decreased by 10%.
How can the reports say prices have increased, but the local agents say prices have decreased?
Welcome to the forum morecowbell and to the world of statistics and data collection.
Just in a few words I'll attempt an explanation:
The data is from medians. Median is not medium. Median is where half the houses sell above and half the houses sell below.
The % rates up or down thing only works for decent numbers of sales occurring in an area or they are SNR.
i.e. If there were 3 sales one month: $600K, $500K and $400K then the median is $500K....(this was also the medium, but that's another story). But next month if 3 sales occurred at $500K, $400K and $300K, then the median is $400K and OMG shock horror the median sales price has fallen 20%.........sell, sell, sell, the sky is falling. What is happening in the suburb? Well possible nothing.....just some lower priced houses sold, is all. So you have to be really CAREFUL with median sales data.
Some data collection companies have tried to avoid this "error" by looking at re-sales of the same properties and I can see merit in this. However, it cannot & does not take into account any renovations or additions that were done to the property.
Add to this mix what the Agents on the ground are saying - they reckon 10% fall? Well maybe, maybe not.
Of the sales these agents make, are they a broad cross-section? (i.e a mix of higher priced, middle priced and lower end) Then I'd be more likely to believe them - as much as you believe any REA
. Or are these agents only selling 30% of all the properties in the suburb and another stronger agent selling the other 70% and they are having a myopic view of the market?
Well I hope you can see where this is heading......with this kind of conflicting data, I'd be checking:
1. Web-sites:
a.
www.apm.com.au
b.
www.rpdata.com.au
c.
www.realestate.com.au
d.
www.residex.com.au
e.
www.homepriceguide.com.au
f.
www.domain.com.au
g.
www.propertyvalue.com.au
h.
http://www.lands.nsw.gov.au
i.
http://www.eac.com.au
j.
http://www.commbank.com.au/propertyvalueguide/default.asp
k.
http://www.onthehouse.com.au
l.
www.htw.com.au
2. Multi-list – sales reports
3. REI in the state
4. Lands Titles Office
5. Australian Bureau of Statistics
6. Various agency sales records - if you can
7. Local council
Analyse the above for data about:
1. Sales history on the individual property (if available)
2. Sales trends – i.e. prices trending up, down or sideways?
3. Days on the market to sale
4. Withdrawn from sale properties
5. Level of discounting from initially advertised selling prices
6. Population demographic:
a. Population size
b. Age stats
c. Family compositions
d. Type of dwelling
e. Nature of occupancy – owned / rented / purchasing
f. Transport to work
7. Covenants / easements / zoning / flood affected? / proposed developments in the area / renovations undertaken
8. Methods of sale – auction or private treaty
9. Clearance rates on auctions
10. Vacancy rates
11. Median rental values
12. Availability of public transport
13. Locations of schools, shops, shopping centres, hospitals, parks & playgrounds, airports, libraries, medical centres, aged care facilities, places of worship
14. Area sewered or unsewered? Natural Gas available? ADSL / wireless or cable internet available?
15. Town water / tank water / bore water available?
16. Heritage Listing
And that's just a start (not a comprehensive list) - you get the idea. Do your own DD.
