Housing bubble in Australia
Feb 18th 2010, 9:41 am
#466
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Joined: Feb 2008
Location: Hope Island, Gold Coast
Posts: 1,920
Re: Housing bubble in Australia
I had the impression that this was your opinion and was also happy to state mine.
Last edited by freebo; Feb 18th 2010 at 9:43 am.
Feb 18th 2010, 9:43 am
#467
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Joined: Feb 2008
Location: Hope Island, Gold Coast
Posts: 1,920
Re: Housing bubble in Australia
Median property prices are the middle price of a range of sales.
Lets take two examples:
100 houses sell at prices between $500k and $600k, half above $550k and half below $550k
The median will be $550k.
Now, lets say a bright developer builds a load of budget priced houses, to cater for the lower end demand, and sells 300 of them for $200k, but at the same time those existing houses DOUBLE in value to about $1million each.
The median will be $200k because half the houses were $220k or under and half were $200k or over.
The median has dropped from $550k to $200k
whoopee the property market has crashed....
But... the other houses have doubled in price.....
In reality property prices have increased by 100%, but the median price has dropped by 60%.
Yes, this is an extreme, to highlight without a shadow of doubt the theory of the system.
Lets take two examples:
100 houses sell at prices between $500k and $600k, half above $550k and half below $550k
The median will be $550k.
Now, lets say a bright developer builds a load of budget priced houses, to cater for the lower end demand, and sells 300 of them for $200k, but at the same time those existing houses DOUBLE in value to about $1million each.
The median will be $200k because half the houses were $220k or under and half were $200k or over.
The median has dropped from $550k to $200k
whoopee the property market has crashed....But... the other houses have doubled in price.....
In reality property prices have increased by 100%, but the median price has dropped by 60%.
Yes, this is an extreme, to highlight without a shadow of doubt the theory of the system.
Feb 18th 2010, 10:06 am
#468
Guest
Posts: n/a
Re: Housing bubble in Australia
This has caused statistical median price rises in those areas.
If money gets tight, and more people start buying the cheaper property again, leaving the more expensive ones unsold, it will create a lower median price even with no actual price change.
Feb 18th 2010, 10:14 am
#469
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Joined: Feb 2008
Location: Hope Island, Gold Coast
Posts: 1,920
Re: Housing bubble in Australia
What we have been seeing in some areas is the new, more expensive, better quaility, houses selling, but the older cheaper ones not selling.
This has caused statistical median price rises in those areas.
If money gets tight, and more people start buying the cheaper property again, leaving the more expensive ones unsold, it will create a lower median price even with no actual price change.
This has caused statistical median price rises in those areas.
If money gets tight, and more people start buying the cheaper property again, leaving the more expensive ones unsold, it will create a lower median price even with no actual price change.
Feb 18th 2010, 11:05 am
#470
Guest
Posts: n/a
Re: Housing bubble in Australia
In Sydney for example, the expensive areas still kept rising even though the West Sydney prices were dropping.
If population growth slows sufficiently, then over time it could happen, if the people with the more expensive properties decide to sell at lower prices. But there has to be a reason for them to make that decision.
Dec 2003 to Dec 2009 in Sydney
New Project Homes rose by 21.8% (Median)
Established Homes rose by 7% (Median)
Yet in Western Sydney, prices on average actually seem to have dropped, based on some actual house sale comparisons. (the same properties being sold in both those years)
Feb 18th 2010, 9:17 pm
#471
Pie Eater
Joined: Sep 2007
Location: South Australia
Posts: 770
Re: Housing bubble in Australia
Median property prices are the middle price of a range of sales.
Lets take two examples:
100 houses sell at prices between $500k and $600k, half above $550k and half below $550k
The median will be $550k.
Now, lets say a bright developer builds a load of budget priced houses, to cater for the lower end demand, and sells 300 of them for $200k, but at the same time those existing houses DOUBLE in value to about $1million each.
The median will be $200k because half the houses were $220k or under and half were $200k or over.
The median has dropped from $550k to $200k whoopee the property market has crashed....
But... the other houses have doubled in price.....
In reality property prices have increased by 100%, but the median price has dropped by 60%.
Yes, this is an extreme, to highlight without a shadow of doubt the theory of the system.
Lets take two examples:
100 houses sell at prices between $500k and $600k, half above $550k and half below $550k
The median will be $550k.
Now, lets say a bright developer builds a load of budget priced houses, to cater for the lower end demand, and sells 300 of them for $200k, but at the same time those existing houses DOUBLE in value to about $1million each.
The median will be $200k because half the houses were $220k or under and half were $200k or over.
The median has dropped from $550k to $200k
whoopee the property market has crashed....But... the other houses have doubled in price.....
In reality property prices have increased by 100%, but the median price has dropped by 60%.
Yes, this is an extreme, to highlight without a shadow of doubt the theory of the system.
It's worth remembering also, the median price becomes more erratic as the number of sales drop.
Last edited by coolshadows; Feb 18th 2010 at 9:21 pm.
Feb 18th 2010, 9:52 pm
#472
Guest
Posts: n/a
Re: Housing bubble in Australia
A quote from their website says: “At present no hedonic price indexes are regularly produced for Australia, a void which RP Data-Rismark aims to fill."
It appears they are aiming to do so in the future, which will be good.
You are right about numbers of sales causing erratic figures, look at these published median prices for Ormiston near me.
$595,000 Jul-09
$600,000 Aug-09
$452,500 Sep-09
$720,000 Oct-09
$612,500 Nov-09
$602,500 Dec-09
$543,000 Jan-10
This information has been obtained by RP Data
$600,000 Aug-09
$452,500 Sep-09
$720,000 Oct-09
$612,500 Nov-09
$602,500 Dec-09
$543,000 Jan-10
This information has been obtained by RP Data
PS: Those RP Data figures confirm the housing bubble has burst, down from 720k to 543k, a 25% drop in 3 months
Last edited by ABCDiamond; Feb 18th 2010 at 9:54 pm.
Feb 18th 2010, 10:04 pm
#473
Account Open
Joined: Jan 2005
Location: Brisbane
Posts: 4,298
Re: Housing bubble in Australia
I don't think it is possible to generate indexes of like-for-like sales with property.....simply because when a person buys a house and moves in, more often than not they will make improvements. The improvements might be tiny, or they might be large scale renovations.
Feb 18th 2010, 10:08 pm
#474
Guest
Posts: n/a
Re: Housing bubble in Australia
Obviously those medians were the monthly figures, based on just each months sales.
When they average it out over time, the differences become much less, so as an example I looked at the same suburb for the annual figures, which would lessen the spikes, and RP Data produced this:
I have highlighted those years to emphasise the 'accuracy' of RP Data published median values, even over a longer time spread.
Both sets of figures that I have shown are publicly available on realestate.com.au for the guidance of property buyers.
When they average it out over time, the differences become much less, so as an example I looked at the same suburb for the annual figures, which would lessen the spikes, and RP Data produced this:
2004 $430,000
2005 $506,250
2006 $440,000
2007 $502,550
2005 $506,250
2006 $440,000
2007 $502,550
Both sets of figures that I have shown are publicly available on realestate.com.au for the guidance of property buyers.
Feb 18th 2010, 10:30 pm
#475
Guest
Posts: n/a
Re: Housing bubble in Australia
In have been tracking property in my area, where the same houses have been sold more than once recently, and I have 4 examples here:
Property 1 Increased by $77,100 after 17 months (17.77%) or about 12.62% per year
$511,000 1/08/2009 Property 1
$433,900 12/03/2008 Property 1
Property 2 Increased by $20,000 after 15 months (4.71%) or about 3.75% per year
$445,000 12/05/2009 Property 2
$425,000 15/02/2008
Property 3 Increased by $10,000 after 20 months (2.27%) or about 1.37% per year
$450,000 30/09/2009 Property 3
$440,000 12/02/2008 Property 3
(This property is known to me and has had no changes made)
Property 4 DECREASED by $150,000 after 13 months (-19.11%) or about -17.03% per year
$635,000 23/03/2009 Property 4
$785,000 13/02/2008 Property 4
$511,000 1/08/2009 Property 1
$433,900 12/03/2008 Property 1
Property 2 Increased by $20,000 after 15 months (4.71%) or about 3.75% per year
$445,000 12/05/2009 Property 2
$425,000 15/02/2008
Property 3 Increased by $10,000 after 20 months (2.27%) or about 1.37% per year
$450,000 30/09/2009 Property 3
$440,000 12/02/2008 Property 3
(This property is known to me and has had no changes made)
Property 4 DECREASED by $150,000 after 13 months (-19.11%) or about -17.03% per year
$635,000 23/03/2009 Property 4
$785,000 13/02/2008 Property 4
Feb 18th 2010, 10:36 pm
#476
Guest
Posts: n/a
Re: Housing bubble in Australia
And people are putting their faith in these published median figures....
Feb 18th 2010, 10:37 pm
#477
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Joined: Sep 2008
Location: newbury
Posts: 943
Re: Housing bubble in Australia
I agree, even with exact properties, it can be very difficult to come up with any sensible figures.
In have been tracking property in my area, where the same houses have been sold more than once recently, and I have 4 examples here:
In have been tracking property in my area, where the same houses have been sold more than once recently, and I have 4 examples here:
Property 1 Increased by $77,100 after 17 months (17.77%) or about 12.62% per year
$511,000 1/08/2009 Property 1
$433,900 12/03/2008 Property 1
Property 2 Increased by $20,000 after 15 months (4.71%) or about 3.75% per year
$445,000 12/05/2009 Property 2
$425,000 15/02/2008
Property 3 Increased by $10,000 after 20 months (2.27%) or about 1.37% per year
$450,000 30/09/2009 Property 3
$440,000 12/02/2008 Property 3
(This property is known to me and has had no changes made)
Property 4 DECREASED by $150,000 after 13 months (-19.11%) or about -17.03% per year
$635,000 23/03/2009 Property 4
$785,000 13/02/2008 Property 4
$511,000 1/08/2009 Property 1
$433,900 12/03/2008 Property 1
Property 2 Increased by $20,000 after 15 months (4.71%) or about 3.75% per year
$445,000 12/05/2009 Property 2
$425,000 15/02/2008
Property 3 Increased by $10,000 after 20 months (2.27%) or about 1.37% per year
$450,000 30/09/2009 Property 3
$440,000 12/02/2008 Property 3
(This property is known to me and has had no changes made)
Property 4 DECREASED by $150,000 after 13 months (-19.11%) or about -17.03% per year
$635,000 23/03/2009 Property 4
$785,000 13/02/2008 Property 4
Feb 18th 2010, 11:13 pm
#479
Banned
Joined: May 2007
Location: Sydney
Posts: 564
Re: Housing bubble in Australia
Median property price in Sydney according to RpData is $510000.
What does this include?
Does this range from 1 bedroom units to 5 bedroom houses. I would say the average family are looking at a 3 bedroom house. In that case, you would have to say that the median price for a 3 bed house in Sydney is higher than the quoted $510,000?
Feb 19th 2010, 1:09 am
#480
Guest
Posts: n/a
Re: Housing bubble in Australia
Wee have both used a lot of these 'median' figures in different scenarios to both try and represent different things.
Median property price in Sydney according to RpData is $510000.
What does this include?
Does this range from 1 bedroom units to 5 bedroom houses. I would say the average family are looking at a 3 bedroom house. In that case, you would have to say that the median price for a 3 bed house in Sydney is higher than the quoted $510,000?
Median property price in Sydney according to RpData is $510000.
What does this include?
Does this range from 1 bedroom units to 5 bedroom houses. I would say the average family are looking at a 3 bedroom house. In that case, you would have to say that the median price for a 3 bed house in Sydney is higher than the quoted $510,000?
I was just looking for something, but found this, and thought I should share it
Not touched or amended by me http://www.homepriceguide.com.au/Pro...ctID=2&source=