How to separate facts from fluff about Melbourne’s property market: Mal James
The REIV’s June quarter median was based on 43 sales – fully 25% had no sale price recorded next to them. Not just undisclosed. But blank. Agents voluntarily provide this information. So the REIV had to ignore a full quarter of the June quarter’s transactions to come up with its median house price.
Why so many unrecorded prices? Well, in a weaker market like we’ve got now, agents and sellers become reluctant to record all sale prices for reasons of ego or business.
The way the REIV came up with that price was to take a statistical average of the two middle sales. One of those sales was $1.37 million (40 Jurang Street with Jellis Craig) and the other was $1.71 million (6 Eyre Street with Kay and Burton). That’s a huuuuge gap, a difference of nearly 25% – so some may say it’s a bit of a stretch to say Balwyn had a $1,540,000 median price based on those two sales.
What if one more of those mysterious Balwyn unrecorded price results had been recorded, and it was below $1,370,000? That would have made the “median” price in Balwyn to $1,370,000, and the median price “growth” would have dropped from 20% to 7%.
If another four or five of those undisclosed price sales had been in the lower half of the pool of results the median price results may well have been lower than the previous year’s median in Balwyn. In other words, what we may well have had is not an increase but a fall in price June quarter 2011 to June quarter 2012.