Hotspotting Podcast | Episode 86 - Lists of Growth Markets Are Dodgy Data

Posted on 26/03/2019  
Hotspotting Podcast | Episode 86 - Lists of Growth Markets Are Dodgy Data

Apple Podcasts button   Stitcher Radio button

The headline that declared Sandgate as “Brisbane’s fastest-growing suburb” was a lie. So too was the first paragraph of the article, which declared that “prices jumped almost 35% in just one year” in Sandgate.

But the syndrome in play here is all too common in mainstream media. Here’s what happens ...

Computer generated lists which rank property markets according to the size of median price growth in the past 12 months provide essentially dodgy data. Places with only a few sales give a median price which is unreliable and therefore the alleged increase in the median price is a special form of dodgy data. The way medians work, if you have a small sales sample, the median will be extremely suspect. At Hotspotting, we exclude any place with fewer than 30 sales in a year.

So whenever you see a list of suburbs where median prices have (allegedly) leapt 30% or 40% in a year, closer examination will usually show that most of the locations on the list are places where there has been only 10 or 15 sales in the past year.

The latest edition of The Ryder Report explains this issue in detail - as well as providing valid data on sales, prices and rents across Australia.

« Back