What is a median price?
The median price is the middle price in a series of sales. For example, if 15 sales are recorded in a suburb and arranged in order from the lowest to the highest value, the eighth sale price is the median price. In the case where there is an even number of sales in a series, the median is the average of the middle two prices.
Why do you use median prices?
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.
Median prices are a guide to market activity, and the REIV does not intend for median price measures to be regarded as a valuation tool. The assessment of a property’s value is a job for a qualified professional who possesses the knowledge, experience and comparable sales information required to do so.
What is a seasonally adjusted median price?
A seasonally adjusted median price takes into account seasonal, calendar-related movements. For example, median prices generally increase in December quarters and falls in March quarters. To identify and remove the seasonal effects of the median price data, the REIV has run through historical median price data from 1992 for metropolitan and regional houses and from 2002 for regional units.
Why do you revise your median prices?
The REIV continuously collects sales data from its Members and revises medians (and the clearance rate) to ensure accuracy. The median price for the most recent quarter is the preliminary one and is revised in three months time and again in a year.
What are upper and lower quartile points?
The lower quartile is the point where one quarter of the sales are of a lesser value, and the upper quartile is the point where one quarter of the sales are of a higher value.
What is the difference between the median price and stratified/hedonic indices?
The median price is the middle price in a series of sales transacted over a period (i.e. a quarter). It does not adjust for compositional changes such as changes in location (sales in more/less expensive suburbs), number of bedrooms, or land size. The median price is an easy-to-understand calculation that is useful in determining actual transactional price changes as opposed to overall estimates of value changes adjusted by location or dwelling type. As such, it is not directly comparable to stratified/hedonic indices that are used for different purposes.
Why are unit prices in some suburbs as high as house prices?
The REIV classification for a unit or apartment consists of higher density (flats and apartments) and lower density (townhouses) types. In general, suburbs further from the CBD have a larger proportion of lower density compared to higher density unit types. Lower density units tend to have more similar characteristics to a detached house compared to an apartment from a high-rise building. As a result, unit prices can be as high as house prices in some suburbs due to a large proportion of units being of lower density. For further information, please click here.
Why are only areas with 25, 30 or 50 sales included in snapshots?
If we use a median price that has been taken from a limited sample, the data will tend to be more volatile from one period to the next, and we are therefore cautious about making a broad conclusion about the market from such figures.
Which regions are ‘inner’, ‘middle’ and ‘outer’ Melbourne?
For the purposes of our analysis we define:
‘inner’ as being within 10km of the CBD;
‘middle’ as being between 10km and 20km from the CBD; and
‘outer’ as being more than 20km from the CBD.
Click here for a full listing of suburbs within these regions.
Which areas are included in ‘metropolitan Melbourne’?
For the purpose of our analysis we define ‘metropolitan Melbourne’ as those suburbs contained within the following 31 municipalities:
Banyule
Bayside
Boroondara
Brimbank
Cardinia
Casey
Darebin
Frankston
Glen Eira
Greater Dandenong
Hobsons Bay
Hume
Kingston
Knox
Manningham
Maribyrnong
Maroondah
Melbourne
Melton
Merri-bek
Monash
Moonee Valley
Mornington Peninsula
Nillumbik
Port Phillip
Stonnington
Whitehorse
Whittlesea
Wyndham
Yarra
Yarra Ranges
Property classification for medians
The REIV provides median prices in two categories: houses and units/apartments. This requires that choices are made regarding dwelling types and the categories into which they belong, as there is considerable variety in styles and designs.
Property that falls under the ‘house’ classification includes:
detached houses
terraced houses
semi-detached houses
holiday houses
duplexes
house and granny flat
Property that falls under the ‘units & apartments’ classification includes:
Sales terms
The REIV distinguishes several sales methods that are often abbreviated in publications. The most common acronyms used to denote the type of sale or result is detailed below. For details on definitions of each of the sales terms, visit PropertyData.
Auction-related acronyms include:
SB: Sold before auction
SO: Auction sale
SA: Sold after auction
PI: Passed in at auction
VB: Passed in vendor bid
Other acronyms include:
PS: Private sale
T: Sale by tender
EOI: Expression of interest
