Data generation is our business. It is everywhere. It is not hard to find data and figures when searching for property. We can also analyze rental growth and tenant vacancies. Auction results and median prices. Find out more information about the different home loan interest rates or vendor discounting percentages. What figures are crucial if you’re buying a home?
Auction commentator Mark RibarskyFrom Wise Real Estate Advice explains ‘surveying the auctions last week, Melbourne had an auction clearance rate of 82% with 150 of 232 auctioned homes sold, according to REIV’s auction result data. This doesn’t tell a detailed story when considering the figures in isolation. This allows you to view the median house price with it. With this knowledge, and with a detailed idea of the area you are looking to purchase in, you may feel better prepared to face the market.’
Is it important to consider the median house cost?
“Median price movements can be very misleading in some suburbs as this is heavily influenced by the type of properties sold. This could happen if ten properties valued at $2m are sold in a single year. [in an area]This could lead to a median of 2 million dollars. If you have twenty sales of $1m in the next 12 months, then the median is $2m. [likely to be]Only $1m. Is this a sign that the suburb is worth less than $1m? No, it just means different types of properties sold that year.”
‘Repeat sales’ figures, which looks at the capital gain for individual properties, which have been resold. This is a reliable and accurate way to monitor market movement.
“I like to look at the volume of sales historically. It’s another indicator of activity in the market and tells you how tightly held a market is. The more tightly held, the lower the volume of transactions.” An example of this, is Windsor, in inner-city Melbourne, which according to realestate.com.auThis area lists only 0.51% all properties in Melbourne. The small number of sales indicates a very tightly held market” says Ribarsky.
What is the median price of a house?
It shows the median price paid for all transactions. If 20 houses were sold and thereafter, ranked in order from highest to lowest, the middle figure – in this case, the 10th place – is the median price.
It’s all there
To put together the story, it is important to gather all relevant data. Data must always be contextualized. Cameron Kusher from Corelogic RP Data says the companies weekly summary should be used only as a guide, particularly as it doesn’t take into account that smaller local markets might behave differently to the city as a collective.
“The clearance rate data, for example, is provided at a more localized level in Sydney and Melbourne and will give an understanding of how strong demand is for auctions in regions of the city. Listing data can be extremely valuable as it provides an overview on the inventory available. When compared with value growth, time on market and discounting data, it can give an overview of the drivers of the market.”
Market figuresIt is useful for buyers to know the length of time a property has been on the market. This shows us how quickly a property has been snapped up in each place. On average, Melbourne’s median time on the market for properties in February was a short 36 days. This was third to Canberra’s 33-day median and better than Sydney’s 37-day mean.
This is a sign we are in a highly competitive market that is moving fast. To avoid the stress, and disappointment, give Wise Real Estate Advice, Melbourne’s leading buyers agentsFor your next purchase, give us a call!