What is the median price?
19-Apr-2010
In the REIV March Quarter Property Update you can read about median prices in Melbourne, Geelong, Ballarat and Bendigo. The median price of a house in most suburbs is available and if you visit www.reiv.com.au the median price of a unit in many suburbs is also available.
In some cases the median price will have increased and in others it will have decreased, but what does it mean if you are an owner, buyer or investor? To understand what the results mean it is important to understand what a median is.
The median is not the average.
The median value is the middle price in a series of sales, where half of the sales are of lower value and half are of higher value. For example, if 15 sales are recorded in a suburb and arranged in order from lowest to highest value, the eighth sale price is the median price.
Median prices are used rather than average prices because median prices are unaffected by a few unusually high or low prices, making them a more accurate indicator of true market activity.
The Institute collects results from around 70 per cent of all residential property sales in the quarter and publishes the suburb-by-suburb results where we believe the sample is an accurate reflection of the sales activity. In the case when there are less than 30 sales in a quarter for a suburb but it is a reasonable sample, the result is ‘starred’ as there are sufficient sales to make the result statistically reliable.
The list of suburbs is based on the list kept by the Victorian Government’s Office of Geographic Names.
