Prospective homebuyers may turn to any number of property price guides published each month to help navigate Australia’s volatile markets, but industry experts say those reports are not always accurate.
What’s more, the excess of information can be an added hurdle for those new to the market.
So where do the publishers of those reports get their property price data, and is it useful for homebuyers?
What does the data say?
The demand to know how the housing market is tracking has grown as the supply of dwellings has tightened in the wake of the COVID pandemic.
It’s a data beast that’s been fed by economists, analysts, banks and realty companies publishing reports to pick the market apart.
But there can be inconsistencies.
Take these analyses from May.
The median house price in Perth according to PropTrack was $699 000, up by more than 20 per cent from the previous year.
But the Real Estate Institute of WA said the median price was $650 000, increasing by more than 17 per cent from May 2023.
That same month, CoreLogic released a report claiming the value of a home in Perth had climbed by 22 per cent in one year.
Why are there inconsistencies?
Director of the Centre for Social Impact at UWA Professor Paul Flatau said there were discrepancies in the data because the housing market was so volatile.
“Day to day, there’s volatility in housing prices … it’s not always that easy to get it right,” he said.
Professor Flatau said reports on the housing market were not compared like forecasts in economics or science, leaving it up to the homebuyer to sift through and compare the information themselves.
“It’s important to recognise that there are good strong specialist housing market economists and forecasters,” he said.
“There are four or five major specialists, there are five or six banks, there is the official forecasters [and] there are four accounting firms.
“It is important that those using that information do look across a range of forecasts.”
Does it help homebuyers?
Director of Perth property group The Agency, Corey Adamson, said by the time the reports are published, the data was often outdated because of finance and settlement periods.
Mr Adamson said the data was only helpful when the market was stagnant.
“We’re in a moving market right now,” he said.
“Where there’s 3,200 properties on the market in Perth, the data just gets old and outdated so fast.
“It gives a false sense of what you could purchase a property for.”
Mr Adamson said property indicators were meant to be used as a guide.
They can become misleading when homebuyers use the data to influence their bid.
“What we see is people struggling to purchase the property if they’re so convinced by the numbers that they’ve seen on any type of database,” he said.
“They always seem to be missing out by $10,000 to $50,000 and it’s not because they don’t have the budget to go there, but they just get to the point where they go ‘nope, it’s not worth that’.”
Where to go for help
Experts and industry professionals have differing opinions about where to get the most accurate information on the market.
Mr Adamson said the first port of call for people trying to enter the housing market should be a real estate agent or a mortgage broker.
“Anytime there’s just numbers on a sheet or a report anywhere it’s up for interpretation,” he said.
“The best way to do it is to actually get out there and get a feel for it.”
Professor Flatau agreed it was worth taking the time to understand the market.
“The idea that you might just speak to one or two real estate agents, or one mortgage broker doesn’t quite gel with me,” he said.
Professor Flatau suggested keeping up to date with sales in real time.
“The past doesn’t always just continue into the future,” he said.
“We’ve had a year and a half, two years of very significant growth in house prices in Perth.”
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