RESEARCH

RESEARCH METHODOLOGY

The REIQ’s residential sales statistics are based upon official sales records as held by the Department of Natural Resources and Mines in their Queensland Valuation and Sales (QVAS) database as well as recent agents' sales advice.

Only sales transactions that are deemed “normal” transactions, ie done at “arms length” are included. All other types of transactions such as mulit-sales, part-sales or transfers and sales where the parties are related are not generally indicative of the market and as such are not included.

Sales data and other market indicators are currently provided to the REIQ through Australia’s leading property data provider CoreLogic RP Data, who augment this information through their own quality control processes.

SCOPE

As Queensland is comprised of such diverse regions (from the capital city of Brisbane to the tourist hubs of Gold Coast, Sunshine Coast and Cairns to the resource centres of Gladstone, Mackay and Townsville), REIQ publish property sales statistics by locality or suburb and Local Government Area (LGA), based upon their respective boundaries at the time of reporting.

In order to provide a broader analysis of the performance of the residential property markets across Queensland, the REIQ publishes both median values (via the Courier Mail) and median sale prices (REIQ Queensland Market Monitor).

It should also be noted that data will only be published for localities and LGA’s that record sufficient sales volumes over the period, so as to ensure the reliability of the data and how reflective it is of current market conditions.

MEDIAN VALUES

In reviewing the current state of the Queensland property market, the REIQ analyses a variety of figures, one of which is the median value. These figures are published each quarter in a Courier Mail Lift out called What is your home worth?

Median values are based upon the estimated value of all properties within a suburb, which CoreLogic RP data calculate using what’s called an Automated Valuation Model (AVM).

Each AVM estimate is derived from several methodologies to determine a value of the each home based on recent and historic sales data, a property’s location and attributes such as lot size, number of bedrooms and number of bathrooms.

The middle value is then calculated for all homes in a region to determine the ‘median value’. The estimate utilises every piece of information available about properties and is a more holistic approach to looking at market changes compared with the median sale price which only consider homes that have transacted over the period.

While median sale prices are useful as a measure of market activity – ie what types of properties are selling and what types of buyers are most active, the median value is a more indicative measure of actual property price growth as it takes into consideration all properties within a suburb.

Median values and other property market indicators such as days on market and average vendor discounting, should however, be used with caution where a low number of sales has occurred (LGAs – less than 50 sales; localities – less than 20 sales). Too few sales means the AVM has less market evidence on which to calculate each properties value over time.

MEDIAN SALE PRICES

Unlike the median value which looks at the estimated value of all properties in a given location, the median sale price looks only at official sales transactions that have occurred during the reporting period, and is calculated by arranging all sales from lowest to highest and taking the middle sale price. Where an even number of sales has occurred, the median is the average of the middle two sale prices.

In order for a median sale price to be calculated, a minimum amount of sales must be recorded under the following criteria:

  Suburbs  Local Government Areas
Quarterly period (all property sales) 10 15
Yearly period (sales with land size under 2400m2 only) 25 50
Yearly period (sales with land size over 2400m2 only) 20 40

 

Median sale prices are typically a good measure of recent market conditions, and whilst simplistic in their calculation, they are deemed a reliable market indicator given they are based on actual sales transactions, and reflect the state of the property market at the time the transactions take place.

Long term median sale prices, that is those calculated over the 12 month period are deemed to be indicative of the trend in property prices, whilst quarterly median sale prices are more reflective of what types of properties sold.

One limitation of this method however (and a reason why different property price measures exist) is that it does not take into account the varying characteristics (such as bedrooms, land size, etc.) of properties sold between two periods. To account for this, annotations are included where available to help explain factors that might have influenced significant price changes between quarterly periods. For a complete list of annotations used please refer to the REIQ Research Explanatory Notes.

AVAILABILITY OF SALES DATA

While the REIQ’s property sales data is based upon on a contract of sale date basis (instead of a settlement date basis), it can take up to 90 days or even longer between when a contract of sale is signed (i.e. the day on which the parties legally agree on the price the property will sell for) and the day on which the property transaction finally settles. Official property sales information is only available once the transaction itself has settled.

To further improve the volume of data available at the time of reporting, the REIQ’s quarterly sales data also includes recent sales transactions as advised by real estate agents. This information is made available to CoreLogic RP data by real estate agents as contracts go unconditional. This came into effect with the June quarter 2013 reports, as such comparisons between sales volumes prior to this quarter should be done with caution.

The REIQ’s quarterly data reports are run approximately five weeks after the end of each quarter, where at this point somewhere between 60 to 70 per cent of sales transactions for that period are available. Hence, this is why all quarterly and yearly sales data for the most recent period are referred to as preliminary and subject to further revision, as additional sales data becomes available.

To compare like with like, the quarterly change in median sale prices compares current preliminary estimates with preliminary estimates for the previous period. A percentage change is not available where there is no preliminary estimate available for either reference period. Due to a larger reporting period and therefore sample size, changes in the annual median over the last one and five years compare current preliminary estimates with revised figures for the previous corresponding annual periods.

For any questions regarding REIQ research, phone 07 3249 7301 or send an email.

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