Charlie Albone, landscape designer on Selling Houses Australia has just returned from Hong Kong and shares some great design ideas he picked up there and as well he has some advice that will save property sellers losing up to 25% on offers when they sell.

Simon Pressley from Propertyology believes that Melbourne is on the cusp of a market downturn and he tells us why.

Michael Yardney shares his top 7 property investment tips you should ignore.

We sort out the confusion that surrounds media reports that confuse median price movements with actual market fluctuations.

When you hear the word forensic do you automatically think of CSI and other TV series that use science to solve crimes?  Now we have forensic cleaners who are being used more and more in property and we tell you why.

Ben Kingsley balances the debate about the Melbourne market and says while things might get tough he doubts it will get as bad as Simon Pressley is saying.

 

Transcripts-

Richard Rossman:

Kevin:  One of the frustrations I’ve had from time to time is how the media constantly plays on medians. If you see a movement in the median, either up or down, they’ll maintain that’s an indication that the market is moving either up or down when it has absolutely nothing to do with it.

Let’s try and clarify that a little bit more for you. I can do that by introducing my next guest, Richard Rossman from Secret Agent and a really interesting article that they’ve put together, which is why you can’t trust averages or even, in this case, medians. I want to talk about the difference between all of those and what that really means.

Richard, welcome to the show, and thanks for your time.

Richard:  Thank you for having me.

Kevin:  This is long overdue, trying to clarify what medians are. Firstly, in your own words, explain to me why we really can’t rely on medians as an indication about what’s happening to the market.

Richard:  Yes, sure thing. Let’s just discuss what an average or a median really is. It’s a metric that tells you if you have all data points, or in this case, all housing sales in your sample and divide that by the total number to get the average or you find the middle number. If you think about it, it’s basically the total money invested in the housing market per house.

Kevin:  The way that I’ve described it – tell me if I’m right or wrong here because you’re much more skilled at this than me – the median is really an indication of where the predominance of people are buying. In other words, if more people are starting to buy more expensive properties, then the median is going to move up. It’s not an indication that the market is moving; it’s an indication that buyers’ habits are moving up. Is that a fair way to talk about it?

Richard:  Yes, basically. The median, if you think about it, is just the middle number of your data set, so it’s between the minimum and the maximum. Especially looking at the whole aggregate, if you have smaller houses and bigger houses, if they’re moving in different directions, the median won’t pick up on that sort of thing; it just picks up on the very general trend of are people spending more money on houses; it doesn’t tell you about the stock or supply of the actual houses.

Kevin:  Let’s take an example because I know in your newsletter, you’ve done that. Let’s have a look at Fitzroy in Melbourne as probably a classic example. Run me through the figures there and that’ll demonstrate the message, I think.

Richard:  Absolutely. We looked at Fitzroy housing sales from 2011 until the end of 2015. What we found was that the reported average would be about 8.7%. Those are the big figures that you often see on national TV, on RealEstate.com.au, or other sources like that. But if you compare it to just using houses that were bought and sold multiple times in that time period without any structural changes to the houses, then you’re looking at a growth