Property market analysts don’t often agree when it comes to calculating median housing prices, but something they do agree on is the fact that housing in Western Australia is becoming more expensive, quickly.
Australian Property Monitors released its June quarter median figure for WA last week of $455,000, claiming it was the fastest quarterly growth rate of all capital cities.
Other analysts believe the true figure is lower, with the Real Estate Institute of WA saying the figure is closer to $420,000.
The institute is known to avoid averages, instead focusing on the quality sales data, supplied in real-time by its Internet Listing Service.
Its June figure was produced through the analysis of more than 60 per cent of sales data for WA at any one time, taking the middle price across the entire range of prices paid for property.
When the remaining 40 per cent of data is analysed, a preliminary figure is revised to show a true figure.
Despite REIWA’s confidence in its own calculation methods, Property monitor Residex says the true median price is even lower, at $406,500, calculated through its non-revisionary method.
WA agent for Residex, Hegney Property Group, believes the inherent problem in other calculation methods was the tendency for them to be distorted by changes from month to month in the types of properties that are being sold.
In a repeat sales index, each property is compared only with the previous sales of itself.
Hegney Property Group managing director Stewart Kestel said the relatively higher prices currently being paid for premium properties were skewing the median calculated using more traditional and simple methods.
“The repeat sales method provides the true capital growth measurement in today’s terms by ascertaining the price a property was first sold for and when it was last sold for, and measuring the growth between those two sales,” Mr Kestel told WA Business News.
With any sales, he suggested, one must look at volumes and if less than 40 properties were being sold in any suburb it would not be enough data to provide an accurate measurement of the market.
Mr Kestel claims a recent paper issued by the Reserve Bank of Australia confirms the repeat sales index methodology was far more accurate than those based on simple movements in median prices.
