Media misinformation is the scourge of real estate consumers everywhere.
And nowhere is the problem of rubbish in newspapers and other media more vivid than when they publish lists of the top suburbs for real estate performers across Australia.
Invariably, these lists are bogus because they’re made up of locations that make the list because of statistical aberrations.
Journalists love their lists – they’re a really easy headline, like “The Top 20 places for capital growth in 2023” – and they either don’t know or don’t care that the locations on the list are there because of “lies, damned lies and statistics”.
The research companies like PropTrack and CoreLogic are happy to provide these lists because it’s easy publicity and so they ask their computers to spit out a list and send it off to the media.
With computers, even in this era of AI, it’s a case of garbage in, garbage out. And if you don’t clean up the list your computer throws up, by checking for statistical oddities and aberrations usually caused by small sales samples, then the list will be rubbish.
But they don’t care as long as it achieves free publicity.
Recently the Newscorp network – which publishes The Australian, the Herald Sun, the Daily Telegraph and the Courier-Mail in Brisbane – published one of these lists under the headline “Queensland dominates nation’s top suburbs for buyers”.
This purported to be a list of the top 10 suburbs in Australia for buyer demand, based on what the statistics say.
Here’s the problem. If a location is a small town or suburb, or a new suburb, and there are very few sales in the year, then the median price data and the capital growth figures will be unreliable.
Indeed, often an absolute nonsense.
For example, you can’t have a credible median price in a location with only 8 or 10 sales in the year. A few sales at the bottom end of the market or at the top end of the scale will greatly distort the figures.
Ethical researchers know this and would never publish data on places with fewer than, say, 30 sales in the past year because the figures will be distorted and unreliable.
But, as I said, neither the research companies nor the journalists give a damn – as long as it creates a clickbait headline.
I’ve had instances where I’ve explained to journalists who called about their list before publishing it, that the locations were bogus and it would be embarrassing to them professionally to publish nonsense – but they’re gone ahead the printed the list and the article anyway.
As I said, they just don’t care that what they’re presenting to you, the consumer, is rubbish.
So that recent top 10 list of the nation’s top places for buyers? How many of the 10 locations had fewer than 30 sales in the past year?
The answer is that 9 of the 10 had sales samples too small to be considered valid entries.
That’s why most of the locations on this top 10 national list of great places to buy are places that most of us have never heard of.
What would you think if I told you that the best places in Australia to buy were Catai, Matcham, Sheldon, Woronora, Chandler and Holgate.
Where? I hear you say.
Some of these places are so small and insignificant that they recorded only 10 or 12 house sales in the entire year.
They say that “if you torture statistics enough, they’ll tell you anything you want to hear” – and that’s certainly true in this instance.
If you don’t care about accuracy or credibility or about helping people, then you’ll be happy to use bogus statistics to tell a story that simply isn’t true.
It’s a stark example of “reader beware”, ahead of “buyer beware”.