Methodology and Key Terms
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 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.
How is the clearance rate calculated?
Click here
to read about how the clearance rate is calculated.
How do you gather your data?
The REIV gathers most of its data online from agents submitting their sales results electronically and it also has a dedicated call centre to collect property sales results at the time of contract. The sales results submitted to the REIV include residential, commercial, industrial and rural sales results from around the state.
Is your data accurate?
All our data is checked for accuracy and questionable sales are either verified with the selling agent or excluded from analysis.
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:
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‘inner’ as being within 10km of the CBD;
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‘middle’ as being between 10km and 20km of the CBD; and
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‘outer’ as being more than 20km from the CBD.
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:
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Banyule
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Bayside
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Boroondara
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Brimbank
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Cardinia
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Casey
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Darebin
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Frankston
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Glen Eira
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Greater Dandenong
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Hobsons Bay
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Hume
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Kingston
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Knox
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Manningham
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Maribyrnong
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Maroondah
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Melbourne
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Melton
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Monash
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Moonee Valley
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Moreland
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Mornington Peninsula
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Nillumbik
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Port Phillip
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Stonnington
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Whitehorse
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Whittlesea
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Wyndham
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Yarra
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Yarra Ranges
Property classifications for median prices
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:
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detached houses
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terraced houses
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semi-detached houses
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residential warehouse conversions
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holiday houses
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duplexes
Property that falls under the ‘units & apartments’ classification includes:
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flats
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units
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apartments
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townhouses
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villas
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bed-sitters