CoreLogic - Current Median House Price
With CoreLogic recently announcing that the Median House Price for Sydney now set at $1.1m, the media, as usual, has started going into a frenzy.
What the Media is Saying
According to Business Reporter David Chau for ABC News, record low interest rates, not as many properties for sale (compared to previous years), and FOMO (fear of missing out) among buyers have caused house prices to surge at their fastest pace in 32 years.
Jennifer Duke, the Economics Correspondent for The Sydney Morning Herald stated on the 29/03/21, “ANZ (which also forecast major price falls last year) predicts home prices in Sydney and Melbourne will experience their strongest year since the 1980s and rise 19 per cent and 16 per cent respectively."
By comparison, The Sydney Morning Herald/The Age Scope Survey on average predicts Sydney property prices to grow 5.9 per cent in 2021 and 4.5 per cent in 2022, with Melbourne prices to rise 4.5 per cent in 2021 and 5 per cent in 2022.
CoreLogic - Tim Lawless
As of Today, Monday the 3rd of May 2021, CoreLogic’s research director, Tim Lawless states,
“Australian housing values lifted by 1.8% in April according to CoreLogic’s national home value index, with the monthly pace of capital gains easing from a 32-year high in March (2.8%). Although growth conditions have slowed, housing values are still rising at a rapid pace, up 6.8% over the past three months to be 10.2% higher than the COVID low in September last year. "
Tim Lawless goes on to say, "the pace of capital gains could slow further over the coming months as inventory levels rise and affordability constraints dampen housing demand. “The slowdown in housing value appreciation is unsurprising given the rapid rate of growth seen over the past six months, especially in the context of subdued wages growth. With housing prices rising faster than incomes, it’s likely price sensitive sectors of the market, such as first home buyers and lower income households, are finding it harder to save for a deposit and transactional costs.”
My View
In my 27 years of being in the property market, I found that almost all predictions about the property market have been significantly wrong.
Remember the significant influx of news reports during the 2017/2018 Property Boom that the “property bubble was going to burst”, we even had so called international property experts predicting the same thing, yet here we are today, and they were ALL wrong.
Looking at my area of influence called Middle Harbour, the average increase has been 12.5% or $323,500. In fact, some suburbs have seen a huge uplift of 29% or $490,000.
Is this sustainable over the long term, one wouldn’t think so, however no-one has a crystal ball, so the best thing we can do is focus on the data we have now and work with what best for our individual circumstances.
UNDERSTANDING THE “MEDIAN HOUSE PRICE”
So how is the median house price determined?
The median house price is the midway point of all the houses/units sold at market price (or sold amount) over a set period (monthly, yearly, quarterly, etc.). That is, if there were 101 houses sold during the month, the median house price would be the house price in the middle i.e., that has 50 house prices above it and 50 house prices below it.
This differs to the mean price, which equates to the average price—adding the sold prices together and then dividing this by the number of sales.
The reason the median price is used rather than the mean is mainly because it is a more accurate indicator of the market, as it reflects the sample size being used.
One of the problems with using the median, however, is that it reflects if there has been a large amount of more expensive or less expensive homes sold in any given period.
In these circumstances, you can often notice large differences in the median price of a certain area from month to month.
For this reason, it is often better to view median prices over periods of time and monitor the trends, rather than looking at one month’s figures in isolation.
HOW THE MEDIAN HOUSE PRICE AFFECT MY HOME?
How does THE Median House Price impact on the sale price of my home?
Well, although it is important to consider the “Median House Price” being reported, don’t get hung up on it, because it is important to consider other aspects such as:
• What other homes are on the market in your area that you are competing with?
• Are you comparing apples with apples?
• Has your home been renovated recently?
• What is the demand in your area?
There are plenty of apps & websites from banks etc offering you a generic valuation on your home, however these rely on the last available data that was uploaded at the last date of sale.
For example, you bought your home back in 2015 when it was in its original condition however, since then, you have renovated, added more rooms, or installed a pool.
These sites don’t necessarily take those improvements into account, and its impact on the value of your home.
So, what is the best solution?
It is to call me, Stephen Cromie from Stallion Realty on 0417 025 129 for professional advice that is tailored to your situation.
With our 27 years of property experience, we can provide you with an accurate market appraisal on your home and provide you with the best marketing strategy combined with our local, national and international data base, ensuring the successful sale of your home.
Visit our website - www.stallionrealty.com.au