Me­dian val­ues, stat way mad­ness lies

Herald Sun - Property - - Agent’s Choice -

Specif­i­cally, the me­dian price is the mid­dle value in a set of val­ues. The me­dian value in prop­erty refers to the mid­dle value in a range of data de­rived from all the prop­erty sales reg­is­tered in a sin­gle quar­ter. This in­cludes the lower, mid­dle and top prop­erty sec­tors.

The dis­par­ity be­tween the me­dian val­ues re­leased by the re­searchers can be at­trib­ut­able to the unique cur­rent eco­nomic en­vi­ron­ment, which has seen no­table move­ment in prop­erty within the bot­tom and top-end price seg­ments.

Ac­cord­ing to RP Data, first-home own­ers ac­count for 27.3 per cent of all owner-oc­cu­piers, more than dou­ble the num­ber of ac­tive first-time buy­ers five years ear­lier.

It is es­ti­mated that sales vol­umes in this seg­ment ac­count for 70 per cent of the en­tire mar­ket. This surge in first-home owner ac­tiv­ity has re­sulted in slight growth in prop­erty priced at less than $500,000.

Con­versely, the pres­tige mar­ket has si­mul­ta­ne­ously seen sig­nif­i­cant falls in prop­erty sales and val­ues, with trans­ac­tion vol­umes drop­ping 3 per cent to 4.3 per cent.

Be­cause of sig­nif­i­cant de­clines in trans­ac­tions at the higher end and the in­creased level of ac­tiv­ity at the lower end, the me­dian house price for Mel­bourne prop­erty has been skewed.

Dur­ing a down­turn or re­ces­sion of this mag­ni­tude, me­dian com­par­isons can paint an in­ac­cu­rate pic­ture of what is re­ally hap­pen­ing and add to the con­fu­sion of prop­erty in­vest­ment.

So, what is the best way to de­ter­mine the value of a prop­erty?

When buy­ing or sell­ing it is im­por­tant to look at var­i­ous sources to de­ter­mine mar­ket value, such as re­cent com­pa­ra­ble sales, com­pa­ra­ble prop­er­ties un­sold, and ex­pert opin­ion from prop­erty val­uers.

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