Do you look at housing statistics and wonder what they mean? Mortgage brokers in Baldivis, Kwinana or any Perth suburb work with housing statistics every day. Sometimes, we forget that it isn’t your job to know them like it is for us. We decided to provide you with a quick guide to some basic housing statistic terms.
Median House Price
When valuers determine how much a home is worth, one of the first things they look at is the median price for the area. The median price is determined by listing every home that has been sold in the area over a period of time, such as the previous twelve months, in order of price. The price in the middle is the median.
The mean, or arithmetic mean, is derived by adding all of the prices together and dividing by the number of prices. For example, to find the arithmetic mean of ten homes, add all of the selling prices together and divide by ten.
So, why do we use the median house price instead of the average house price as a starting point for value? Because the mean can be influenced by the bottom and and the top end of the market. If a home sells for too much or too little, it can influence the mean. The median is seen as a truer measure of the value of the average home.
Dwelling is a common term for those who create housing statistics. It means a place where people live. It can include a house, townhouse, apartment, unit or even a tent.
Seasonally Adjusted Statistics
The Reserve Bank of Australia (RBA) and Australian Bureau of Statistics (ABS) usually present housing data in the form of seasonally adjusted numbers. Since housing sales are usually weak in the winter and strong in the spring, both the RBA and ABS adjust statistics to provide a more accurate view of the market.
Year on Year Growth
This means “growth over the previous twelve months.” For example: June 2014 to June 2015. It gives an accurate picture of the current market.
To learn more or to enquire about a home loan, call Smartline Rockingham today: (08) 9527 1800.