First published 12/09/2012
Why do data providers show contradicting median house prices? And why do some statistics sometimes appear hard to believe?
Each researcher uses different methodologies in their calculations. These sometimes rely on different raw information, though each largely reflects similar price movements.
Most property researchers collect their data from two sources: real estate agents and the valuer general in each state. Normally there is a lag of up to six months between a date of sale and when official valuer general data can be collected, though this timeframe varies between states. This means that regardless of which data provider you’re looking at, some suburb’s median price estimates could be based on sales that occurred up to six months ago.
Real Estate Institute of Australia
These indices are based on simple median prices. A median price index ranks all sales from high to low and plucks out the middle.
Australian Bureau of Statistics
The ABS reports a stratified median price method. This divides the property market into subgroups suitable for analysis, though ABS medians cover only detached houses in capital cities.
Australian Property Monitors
APM also publishes a stratified median price method. APM reports medians relating to all property types in capital cities, dissected according to houses and units.
Residex uses a “repeat sales” method, combined with other sampling techniques. A repeat-sales index examines how recent sales compare to purchases of the same type of properties over time.
Their preferred benchmark is the hedonic index. This is calculated using recent sales data, in conjunction with information on the attributes of individual properties, such as how many bedrooms there are.