When reading around on real estate on the internet, one is sure to come across housing statistics that sound authoritative yet at the same time, confusing. To help you out, we have compiled some of the terms and types of statistics that pop up regularly.
As part of research for your next house, seeing the median price for your desired area is the usual indicator of how much you need to borrow.
Median house price
Prices of all the homes sold in a period are lined up in order, and then the middle price is selected as the median.
The point of this is to avoid the number being skewed by super-low or super-high prices, like they are in mean prices.
Although it is rarely seen when describing house prices, this is a common statistics term.
The mean is used to find the average of a set of data, where the values of the items are all added up and then divided by the number of items.
A favourite term in housing statistics. The Victorian Department of Environment, Land, Water and Planning defines it as “a structure which is intended to have people live in it, and which is habitable”. This can include houses, apartments, units, townhouses, caravans and tents.
It’s used quite a bit in its statistics as it gives a single blanket word for all types of property.
Seasonally adjusted series
This data is usually presented by the Australian Bureau of Statistics (ABS) and Reserve Bank of Australia (RBA) instead of raw data – the data that has been collected.
Housing occurs in cycles, with sales predominantly stronger in spring and weaker in winter. Removing the effects of the season, in other words seasonally adjusting them, gives us a better view and understanding of what’s happening in the market.
In addition to the seasonally adjusted series, the ABS and RBA likes to include trend series to further dive deep into the data to find out what is happening in the market.Trend series
They creates the trend series by taking out any irregular effects. These are anomalies that aren’t dependent on season, like natural disasters or changes in legislation.
This is a term that gets thrown around a lot to describe how markets are doing. It is useful when trying to figure out how fast house prices are rising when working out how much your home loan may be. This describes how much the area’s prices are growing each year, but it is usually adjusted every month to better reflect conditions.
As it is a longer-term measure than figures like quarterly growth, it tracks slower underlying changes in the market.
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DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.