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Median House Price - Australia

Discussion in 'General Property Chat' started by Big Will, 23rd May, 2016.

  1. Big Will

    Big Will Well-Known Member

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    Hi All,

    Was reading the Complain or Conquer thread - taking my time.

    However with all the talk of the median house vs the median wage and affordability, it got me thinking.

    What is the median house price for Australia? I did a google search and visited 5-10 sites (inc ABS) but couldn't find it.

    I can find the weighted median from using the capitals cities however this wouldn't give us a true representation.

    To me if you are using a median national wage we should be looking at the median house price. As comparing Sydney median house price vs the median wage is kind of silly as I suspect the higher than average/median national wage is earned there compared to country towns.
     
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  2. Scott No Mates

    Scott No Mates Well-Known Member

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    There isn't one.

    How can you compare a donger in Mt Isa to Cottlesloe Beach?
     
  3. Big Will

    Big Will Well-Known Member

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    What do you mean you can't compare? Yes they are two different properties same as ones on the waterfront at Sydney Harbor and properties 100km away from Sydney CBD - they are both properties.

    For your example so what if one cost 10,000 and the other is 10,000,000 (did zero research) they both would have a median. Not like I am asking for what was the median price for all houses and apples sold in the last year.

    If we cannot compare that then how do we have a median wage nationally? Or you saying we shouldn't compare a minimum wage earner to a CEO of a multinational corporation?
     
  4. wogitalia

    wogitalia Well-Known Member

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    Medians will always say as much or as little as you want them to.

    Ideally you'd compare incomes in market to property in market but that's very difficult.
     
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  5. Bayview

    Bayview Well-Known Member

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    Median -

    4 houses sold....3 for $300k each.....1 for $2.5m

    median is $1,700,000

    How about if you add up all the sales of the houses in all the mining towns in Aus over the last 3 years, and all the sales in Sydney over the last 3 years?

    Mining towns - major crash. Median for Aus - goes up.

    Hardly a stat that will reflect any accuracy across Aus as a whole.
     
  6. wogitalia

    wogitalia Well-Known Member

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    Median... this word does not mean what you think it means...

    I have actually got no idea what your number represents but the mean would be $850,000, the median would be $300,000 and the mode would be $300,000 also.
     
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  7. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    Agree with @wogitalia
     
  8. Scott No Mates

    Scott No Mates Well-Known Member

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    It is a job creation scheme for statisticians.

    You can compare median wages in an area against median prices in an area as a guide to affordability but there's no contest when it comes to comparison of two totally distinct groups (and pointless). There's a large variability between highest & lowest income across the country so the only commonality is '$' not effort, education, old school ties, religion, sex, professional association or union etc - there are simply too many other variables to make any sensible comparison along these lines.

    Give @Big Will a prize - it's pointless to compare a minimum wage earner with a ceo.
     
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  9. Bayview

    Bayview Well-Known Member

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    Actually; it appears all three of us are incorrect;

    Median - Wikipedia, the free encyclopedia

    I was correct insofar as what I thought I was describing; but got the term wrong.

    The median is the halfway point of the total number of sales - whatever that number happens to be...so my example was wrong in that sense.

    What I was getting at is that it takes very few enormously expensive houses to eclipse a load of very cheap houses when comparing the prices to gauge the average price.

    If a load of very cheap houses sell compared to a few very expensive houses, then this will bring down the median - and vice versa.
     
  10. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    No, @wogitalia and I were right. Median is where the middle value sits. I quote:

    In statistics and probability theory, a medianis the number separating the higher half of a data sample, a population, or a probability distribution, from the lower half. The medianof a finite list of numbers can be found by arranging all the observations from lowest value to highest value and picking the middle one (e.g., the median of {3, 3, 5, 9, 11} is 5). If there is an even number of observations, then there is no single middle value; the median is then usually defined to be the mean of the two middle values [1][2] (the median of {3, 5, 7, 9} is (5 + 7) / 2 = 6), which corresponds to interpreting the median as the fully trimmedmid-range.

    In your example, 300k, 300k, 300k and 1.7m.
    You then take the average of the 2 middle values. Which ends up being 300k.....

    I didn't get a distinction in a postgraduate (Masters degree) Stats subject at USYD by doing nothing....
     
    Last edited: 23rd May, 2016
  11. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    Never use the average, its deceptive. Use the median.
    True, just remember. The median ignores all outliers. It only cares about the values right in the middle.... I recommend you should read wikipedia again so you are clear or watch a stats video.
     
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  12. Scott No Mates

    Scott No Mates Well-Known Member

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    It depends on the answer that you're after, just like all stats. Why not use the mode or modal ranging? ie the range where most of the sales occur - this is no more right or wrong as other methodologies. It can be skewed eg: if a few new blocks of units/major land releases hit the market pushing the sales prices into a defined range. Likewise, resales of similar units/houses/land will fall into the same bands (all things being equal).
     
  13. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    True, but median will work anywhere you are trying to describe housing prices. Modal ranging might make sense when you have certain populations of houses as you described, but how would the ranges be chosen?
    Ps. This would be so useful when they show quanitites of properties for sale grouped by price band in our local area newspaper, but they stupidly break it up into 200k groups to about a mill then basically go in big jumps and lump everything else together.

    But all the house prices sit in the over 1 mill price band, no houses in the area sell for under a mill. Therefore the price bands they show in the paper are irritatingly useless. They need to keep up with the prices properties actually sell for!
     
    Last edited: 23rd May, 2016
  14. Joynz

    Joynz Well-Known Member

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    The median is more useful because as all prices increase, the median will too, but it won't be skewed unduly by very expensive properties.
     
  15. Big Will

    Big Will Well-Known Member

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    1. Then I have found a new job for statisticians for finding the median of the Australian price.

    2. What is the point of comparing anything as there are to many variables with everything.

    3. You clearly misunderstood my post, we were talking about comparing the median wage (which I am glad people now understand level 8 basic maths). So if we remove the CEO level wages and the minimum wages we would have a very different number (a lot higher) as our median wage nationally. As I am just taking a guess there are far more minimum wage earners than CEOs, not that I am going to research to confirm this.

    Finally I still really don't see why we cannot have a median house price for all of Australia (as pointless as the information is to others), the raw data is there.
     
  16. Scott No Mates

    Scott No Mates Well-Known Member

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    @Big Will - although the data may be available, do we need it?

    Investors are more interested in researching their patch of dirt than knowing that the next property that they're considering buying is 10% cheaper than the national median (& they should feel proud?).

    If you buy BIS Shrapnel reports into housing, you may get lucky
    If they don't have it no one else will.
     
  17. Big Will

    Big Will Well-Known Member

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    Scott my question was based from the forum thread mentioned in my OP that people talk about median wage vs median house price for Sydney (example). Whereas the median wage for that suburb in Sydney would be significantly higher than the median wage in Mt Isa (again I am assuming).

    To me do I actually want the median Australian house price, no. It would serve little benefit to me the same as knowing median house price Mt Isa or even the price of eggs in China.