When buying or selling, one of the really useful pieces of information to be in possession is the median sale price for your suburb.
These figures are released in the media at a capital city level every month, and are used as a benchmark to determine if the market is going up, down or sideways. The month by month movement of the median sales price is the barometer that identifies the levels of market growth – or easing. Even small changes can be seized upon by the media to proclaim that the market is either overheating or in dire risk of complete catastrophe, but often these are just headlines. What you really want to understand is how the median price in YOUR local suburb is performing.
Here’s 4 things to understand about median sales prices:
- Always know your median price for your suburb:
Knowing your capital city median price is not enough. You need to know what the median for your area in particular. Even postcode or local government information is of limited use as suburbs within these areas can vary quite considerably.
2. Know your median price for your property type:
Within each suburb, houses and units have quite different median prices – with houses usually having higher medians than units on the basis that the land value makes them worth more. The median performance – ie: growth – can often be quite different between houses and units too. For example, prices for houses may be growing more strongly than units if there is a shortage of stock on the market and it is even possible for one type of property to be growing while the other is easing.
3. Understand that a median sales price is based on what is selling:
It is a common mistake that buyers or sellers assume the median sales price is the median price of all property in the suburb. It’s not. It’s the median price of all property that is selling in the suburb. That means if your suburb is full of four bedroom homes which are quite expensive, but most of the sales are happening in cheaper 2 and 3 bedroom homes with people trying to enter the market, then the median price may be lower than you’d expect. (So if you are the owner of a 4 bedroom home, don’t panic!).
Equally, if a new block of luxury units goes to market when your suburb is dominated by flats built in the 1960s or 1970s, the median price might be higher than you’d expect because the expensive new units are where the sales were made. (It doesn’t automatically follow that every unit in the suburb is now worth that higher amount, so if you own one of those cheaper apartments, don’t automatically count your chickens).
4. What is the median price is for properties with similar features?
If possible, try to find out what the median price is of a property with the same number of bedrooms, bathrooms or cars to yours. This data usually requires some digging, and may be based on small numbers (so be a bit volatile), but it can be insightful. Your agent should be able to supply this information.