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A need for a better house price indicator

Comments on Toby Johnston “Coast watch: the best and worst performers”, 14/01/2013, http://smh.domain.com.au/real-estate-news/coast-watch-the-best-and-worst-performers-20130111-2cjm2.html

While it is a general practice to use median price to compare price movement over time, that very indicator can be problematic, particularly when the market is thin and the number of properties sold in a particular time is small.

They may not always be comparable and can be very misleading. The very large percentage changes listed in the article are likely to indicate the problems with such comparison as opposed to real changes in prices in those areas. The current Australian hosing market does not support those big changes.

Having said that, it is difficult to tell a simple story on price movement, I have to admit.

But some property research and information gathering organisations should develop a more effective method to tell the true picture of housing market.

I would recommend trying to use some kinds of weights using the characteristics of properties sold, including types, size, bedrooms, location, etc.

Unless one uses a more meaningful and more reliable method, lot of the property reports and analyses are non-sensical.

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