Dodgy stats? We don’t go for that
Do you feel duped and hoodwinked by some of the more sensationalist property market news?
Do you think some of the so-called ‘property experts’ don’t tell the whole truth?
Confident reports can persuade us. Many reports claim to have the latest word on the ‘top growth suburbs’ and ‘the highest rental yields’.
But if we examine the reality behind the headlines we tend to see a different picture.
The Importance of Statistics:
Statistics can be interpreted in a number of ways, and all too often misinterpreted or even wilfully twisted and misrepresented.
It is easier than ever to access information about capital growth within states and across suburbs. However, this increased availability and speed of data comes with its new challenges. We need to review the available data with a critical eye. We should not allow emotion to cloud our logic.
Why Dream Design Property Is Ahead Of The Game:
At DDP, we have dedicated staff with razor-sharp analytical skills who are responsible for ensuring they provide our clients with objective, holistic, thorough and crystal-clear analysis of property statistics.
We always take a ‘bigger picture’ approach because we understand that no investor ever got rich by putting all their trust in one single source of information. We won’t give you a ‘ballpark figure,’ and we don’t draw quick conclusions from median price data.
Median price anomalies do not represent ‘capital growth’ and can be very misleading.
Medians give you a ‘general gist’ and provide a reasonably reliable indicator of the direction of the market. However, they are not useful for measuring real house price growth rates.
This is because medians are affected by the disparity of the housing market both between and within states, plus a range of other factors, such as:
- First-time buyers and downsizers tend to buy properties at the lower end of the price bracket. Therefore pushing the median down. Upgraders are more likely to buy homes at the higher end of the price bracket, which pushes prices up.
- If smaller and lower-priced homes are built, the median will fall.The median is likely to rise if larger or more luxurious homes are built. This does not mean house prices have necessarily appreciated. Demand has changed the type of houses being built and sold.
- Renovating or extending homes can push the median up when capital growth rates have actually remained unchanged.
- Sometimes the median shifts upwards because of heavy developer activity.