Why median property prices can be misleading

Sort the recorded sales in that boundary and period by price. Pick the middle one. That is the median. It is preferred to the average because one very expensive sale does not drag it. It is still a statistic about the sales that happened, in the period, in that boundary. Each of those three words is a source of error.

Labelled illustration, not a live suburb tape. Quarter 1: 28 house sales, house median $920,000; 12 unit sales, unit median $610,000; all-dwellings median $840,000. Quarter 2: 16 house sales, house median $925,000; 30 unit sales after a block settles, unit median $615,000; all-dwellings median $680,000.

The house median barely moved. The all-dwellings median “fell”. Reports can call that a market fall. It is composition. The same thing happens with renovated versus original stock, or waterfront versus inland, whenever the share of the set changes. Prefer a median by type. Even then, “house” is a wide class. Brunswick (Vic.) SAL20361 stock on Census night 2021 was a mixed object: houses, townhouses and apartments each near a third. An all-dwellings sale median in a suburb like that is a mix statistic until the publisher splits type.

A median of 200 sales is a summary. A median of 9 sales is a coincidence. Remove one sale and it moves. Small suburbs, quiet quarters and rare types produce small samples. A quarterly change on a dozen transactions is not a trend. Districts prints the count so you can weigh the figure. It does not invent a median for a period with no sales.

These mistakes skip the count or the mix.

• Reading a quarterly change as growth without the count and the types.
• Comparing all-dwellings medians across suburbs with different stock.
• Using the median as a comparable for one lot.
• Treating an all-dwellings median as a house median.
• Ignoring the period. Twelve months and three months are different objects.

A median that cannot survive those five questions is a headline, not a tape.

It does not establish that every property rose, or that a lot below the median is cheap. A suburb median up 8 per cent is consistent with a mix shift, a small sample, or many individual sales having gone the other way. It is not a valuation. See why Districts does not provide a valuation.

Suburb profiles show the median sale with period, source and sales count, labelled as a suburb figure. Property pages do not present that median as the lot’s value. The property prices methodology says so. Where there is no figure, the profile says unavailable.

Ask any publisher for the period, the boundary, the sample size and the property types. If those are missing, treat the figure as an illustration. For a specific property, use recorded comparable sales and, where the decision needs it, a registered valuer. A twelve-month house median with 40 sales is a different object from a quarterly all-dwellings median with 9. Write both labels before you subtract them. If the publisher will not give the count, you do not have a median you can weigh.