What do you make of this?

Brenda Irwin

Brenda Irwin

REIQ published a 5 page guide to median house prices during 2003 in last Sunday's edition of The Sunday Mail.

The idea behind it was so people could see how much their house values had risen during 2003.

They also had the Sept and Dec quarter 2003 medians.

Did anyone notice some suburbs had actually decreased in value during the Dec quarter?

Is there anything in this and what do you think it means?

For eg: Ascot - Sept qtr = $810k, Dec qtr = $570k, qtr change of -29.6%.
Auchenflower - Sept qtr = $560k, Dec qtr = $490k, qtr change of -12.5%.
Hamilton - Sept qtr = $700k, Dec qtr = $560k, qtr change of -20%.
New Farm - Sept qtr = $692k, Dec qtr = $614k, qtr change of -11.3%.

On the opposite end of the scale there were some good increases:
Clayfield - Sept qtr = $489,150, Dec qtr = $630,000, qtr change of +28.8%.
Hendra - Sept qtr = $437,500, Dec qtr = $544,000, qtr change of +24.3%
 
The main problem with areas like Ascot is that a lot of the property is very expensive. With the slowing down of sales in the dec quarter, the figures may not be truly representative of the capital growth situation.

The main problem with something like the list in the Sunday Mail is that it fails to indicate what sort of properties were sold, number of sales, how many were put on the market etc. Changes over a quarter can go dramtically up and down, particularly if the number of sales is low.

I wouldn't read too much into those figures (or the +44% at Mount Cotton Yippeee!!!). However continually falling over a number of quarters would be a cause for concern.

P

Brenda Irwin said:
REIQ published a 5 page guide to median house prices during 2003 in last Sunday's edition of The Sunday Mail.

The idea behind it was so people could see how much their house values had risen during 2003.

They also had the Sept and Dec quarter 2003 medians.

Did anyone notice some suburbs had actually decreased in value during the Dec quarter?

Is there anything in this and what do you think it means?

For eg: Ascot - Sept qtr = $810k, Dec qtr = $570k, qtr change of -29.6%.
Auchenflower - Sept qtr = $560k, Dec qtr = $490k, qtr change of -12.5%.
Hamilton - Sept qtr = $700k, Dec qtr = $560k, qtr change of -20%.
New Farm - Sept qtr = $692k, Dec qtr = $614k, qtr change of -11.3%.

On the opposite end of the scale there were some good increases:
Clayfield - Sept qtr = $489,150, Dec qtr = $630,000, qtr change of +28.8%.
Hendra - Sept qtr = $437,500, Dec qtr = $544,000, qtr change of +24.3%
Click to expand...
 
Brenda,

It's also worth keeping in mind that median is not such a good guide on a quarter by quarter basis.

Firstly certain quarters, such as December & March, have 'dead' periods (over Xmas/New Year) where prices traditionally decline slightly anyway and there is significantly less activity.

Also median is based on the middle figure - so if you have a period when mostly lower-priced or mostly higher-priced properties are sold, this can distort the median. The actual value of your properties in the area may not reflect the apparent change in the median price....for example if an entire new luxury development is sold off at higher than median price for an area it tends to push the median up.

I prefer to use median for 12 month snapshots of a market - but even then there are distortions not always reflected in your property's value.

Cheers,

Aceyducey
 
Brenda,
maybe the performance in those areas has slowed,after all how many investors
have 500k in thier back pocket to invest in those areas.all this shows to me is one thing the undervalued inner city areas will now catch up most of the properties i have looked at in the last 3 weeks have all sold some for up to 50k
less then they wanted ,,well thats what the agents tell me.
good luck
willair.
 
Kidders, Morayfield figures are
47% increase from 2003-2004
7% increase from sept to dec qtr 2003.

I agree that median prices are less accurate the smaller the sample size.
If the Sept qtr saw 200 sales, and the Dec qtr 40 sales, sampling error is high in the second qtr. Extrapolations to populations from a small sample are statistically unrobust.

Sandgate also went backwards. This could be an artefact if there were more low priced homes sold than higher priced close to water homes.

Forget median prices between qtrs. It is a nonsense.

The truest analysis is to compare homes of similar quality (age, renovation state, aesthetics) in a similar location (same street).
 
Actually there was an article in the most recent API mag about Residex changing the way it approaches median prices. It is apparently going to now present a median value, rather than a price, as it can be misconstrued for the reasons already mentioned.
 
Jacque said:
Actually there was an article in the most recent API mag about Residex changing the way it approaches median prices. It is apparently going to now present a median value, rather than a price, as it can be misconstrued for the reasons already mentioned.
Click to expand...


I'll have to subscribe to API. I keep missing it at the newsagent.
Am a little fuzzy on the diff between value and price, but will read up on it.
I would be interested to know how property valuers value in a rapidly rising market. Historical data and yields would be less relevant. It would have to come back to what a market run on sentiment and fear and greed dictates.
The banks could put a serious brake on a boom by deciding not to lend based on valuations beyond a certain growth rate.
 
Bruce,

Banks :mad: :mad: (or others) lending based on a certain % (say 95%) of its actual value may not be a bad thing if one is considering selling (which I am not one).

I have always thought that banks took a conversative approach anyway when obtaining a value of one's properties?

kidders
 
Kidders, my experience last year was that the banks were happy to lend me 80% of the contract price in a fast rising market. The broker reckons they relent to lending at the contract price if it fits closely with sales in the area within the last few weeks. I suppose they keep their own data on these things. It still seems pretty unscientific to me though. If a house in a street sells for 220k and 6 weeks later a guy contracts on a similar house in the same street for 280k, how can the banks justify the difference???? fuzzy logic!!!
 
My sister read Aust Bureau of Statistics figures out to me over the phone from an article in yesterdays paper stating that the boom in Syd & Melb was over (no surprise there) but that Brisbane was leading the pack with 12 months median growth of 35%..damn the outer suburbs must've jumped is all I can say. (does this sound far fetched to anyone else?)

But back to Brenda's original question...

I suspect these figures could relate to simply only the cheaper end of some of the more expensive suburbs were moving in the last 12 months so the percentages dropped. (this is just a guess though)...

Jase
 
Jase,

If you read the articles, there is a strong belief that this could be partially due to the drop in first home buyers & trading up phenomenon whereby people are cashing in & trading up (either from other states or within queensland).

So the top end of a number of suburbs is moving more than the lower end :)

Cheers,

Aceyducey
 
Jacque said:
Actually there was an article in the most recent API mag about Residex changing the way it approaches median prices. It is apparently going to now present a median value, rather than a price, as it can be misconstrued for the reasons already mentioned.
Click to expand...

Fail to see how this method is really feasible. Sounds like a marketing 'point of difference' for Residex.
 
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