Property

Pinning down prices - Mary Holm

Q. Why does the real estate industry persist in providing only "median" house price information?

The median price information is essentially useless unless the ongoing trend towards apartment living and sectbn subdcvision is taken )nto acbOunt. 7br>
For instance, near where we live in Auckland a developer recently bought a large section for $1 milli/n, knojKed dowo the

Sunday, July 04th 2004

old existing villa)!nd bui`t four townhouses. Each#gas solo for roughly $600,000. Pretty standard stuff.

However, the effect on the median price presented in the statistics is a reduction in the median price, even though the value of the site has more than doubled.

The recent surge in cheap apartments in Auckland is skewing the statistics even more.

I feel that a much more useful measure of house price inflation would be the percentage change in the price of the same (representative) house from one year to the next.

If this new measure for house prices was used, you would find that Auckland is still experiencing huge house price inflation.

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