- DerekMember@derekJoin Date: 2004Post Count: 3,544
Median price changes are often quoted in the press and I am sure some property investors use them as a guide for their investment decisions.
Just to highlight how flawed this data can be – I was reading the WA Property report in Sunday's paper. Ardross was listed as the best performing suburb in the south of Perth with a price increase of 8.7% over the previous 12 months.
8.7% increase was based on 29 sales. What the report did not mention was 29 sales represents approximately 2% of all properties in Ardross.
Out of interest Derby was listed as the highest growth area in WA over the last 12 months with growth of 90.3%. Yes that is right 90.3%.
This figure was based on 16 sales which represents 1.7% of the total Derby market.
So message is use median prices with care.BMWParticipant@bmwJoin Date: 2012Post Count: 25
Yep, I was looking at property online in Dunedoo, a small town in central west NSW.
Was surprised the medium price was $220 000. Seemed a bit expensive, until I realised it was based on only one sale.Scott No MatesParticipant@scott-no-matesJoin Date: 2005Post Count: 3,856
Even if there are a large number of sales there is always the risk that the median has been
skewed by new developments dumping better than average properties into the mix.Andrew_AParticipant@andrew_aJoin Date: 2003Post Count: 392
Yes medians are to be used with care if at all, same with a lot of data, historic growth rates is another I see used and abused often with the unspoken assumption usually being suburbs with higher rates will make better choices in the present.