Terry’s View: Beware Of Rubbery Figures
Australian consumers can be forgiven for thinking that property price data published by research firms like Domain and CoreLogic is a matter of fact.
The median house price for a city, you might think, is a matter of fact and how much it has risen or fallen is a matter of fact.
Right? Well, actually, no. Media reports these figures as if they are absolute fact - but they are not.
Like all real estate data, median prices are rubbery figures.
The median price for a city, and how much it has changed recently, depends on whose figures you believe. All research businesses have their own methodology for calculating median prices – and the reality is that one research entity has different figures from the next one – so it can get very confusing.
The property website Domain has just published its figures on property prices up to the end of 2023 – and their numbers are starkly different from those published by CoreLogic – and reported by journalists as the gospel truth.
CoreLogic says the national market leader in 2023 was Perth, because its median house price rose 15.6% last year.
But Domain says Perth’s median house price rose 11.9% and wasn’t the national leader at all – that honour was given to Adelaide, where the median house price rose 12.7%, according to Domain.
CoreLogic says Brisbane was the No.2 performer on house price growth last year, with its median price rising 13.3% - but Domain disagrees. It says Brisbane increased only 9.7% - which is quite a substantial difference – and it ranks Brisbane behind Adelaide, Perth and Sydney on price growth last year.
Canberra fell 4.6%, according to Domain, but CoreLogic says it increased 1.0%.
And how much are those median house prices in each of the capital cities? CoreLogic says the median house in Sydney costs $1.4 million, but Domain says it’s $1.595 million – that’s a difference of almost $200,000. In Melbourne you pay $945,000 for the average house, if you believe CoreLogic, or $1.047 million if Domain is correct. The disparity there is over $100,000.
Domain says the median house price in capital city Australia now is over a million dollars - $1.094 million, but CoreLogic says $937,000 – a difference of $157,000.
How can anyone make sense of these really big differences in the views of two major research sources, who really don’t agree on anything when he comes to prices in our city markets and whether markets have risen or fallen, or by how much.
It’s important to understand that median price figures, like all real estate data, are rubbery figures – and always need to be treated with caution.
And, if you’re wondering where Hotspotting sources its price data, the answer is PropTrack, the research arm of the leading property website, realestate.com.au - which we think has the most reliable and up-to-date data available.
We use PropTrack for the data feed that populates the Research Portal which can be accessed by customers who have one of our memberships.
