News Report-slump in 2006

Hi all,[biggrin]

Hi zen,[biggrin]

Did I read less than 3 percent drop in the last 12 months? I don’t know anything about property in Victoria but a drop of that size is not alarming considering how much it has gone up. I really don’t know who to believe, some say 10 – 15% drop some say still holding up. What is going on???
Your confusion stems from how statistics are interpreted and reported, and from the accuracy of the source and the size of the sample. The following link shows Victoria’s figures listed suburb by suburb for the quarter ending in September.

http://www.heraldsun.news.com.au/common/story_page/0,5478,11231897%255E2862,00.html

From this list we see a capitol gain of 171.7% in the figures reported for East Melbourne, with a rise from $900,000 to $2,445,000.
Now does this mean a rise of this magnitude for units, or that more mansions were sold in this quarter than the last, or putting it another way were less units sold during this quarter.
The point here is that glitches can occur with gathered data.

The next link is a summary from property reporter Kamahl Cogdon.

http://www.heraldsun.news.com.au/common/story_page/0,5478,11224700%255E2862,00.html

An extract from this article appears below.
We believe price growth and activity levels have bottomed out,” REIV chief executive Enzo Raimondo said. “We are likely to see a period of stable or minor growth in the foreseeable future.
The most important part of his original statement has been omitted, what he actually said is.
“We believe price growth and activity levels have bottomed out and, given the current economic environment, we are likely to see a period of stable or minor growth in the foreseeable future after three consecutive quarters of negative growth,’’
This puts a different slant on Enzo Raimondo’s statement,if you take into account that the economic definition of a recession is where growth is negative for two consecutive periods.

Wakelin Property Advisory general manager Paul Nugent backed the forecast. “If ever the market ratchets up, it will do it from mid to late February and particularly through the course of March,” he said.
Paul Nugent is not backing up the statement he is stating that historically the property purchasing peak is during this period.
From the above it can be seen how statistical data can be altered according to the self interest of the party who makes information available to the public and can lead to conflicting statements and can cause confusion.

Regards
Bryce Inglis
Financial Advisor
[email protected]

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