The Herald Sun today has reported large discrepancies between the average house price released by the Real Estate Institute of Victoria (REVI) and official data from the Valuer General. In some cases, the REIV prices are inflated by up to 18%. In comparing the two figures for every quarter, it appears these large discrepancies have been occurring in every quarter since the start of 2007, a period when the housing market started to loose steam.
For the quarter of September 2009, the average house price for Victoria as released by the REIV was $480,000. Yet the official valuer-general’s numbers are more like $413,000, some $67,000 lower.
Experts indicate the difference in the figures is possibly due to agents failing to report their less impressive sales, skewing results.
This had been a big problem in the Melbourne market for a while, especially with auction clearance rates. For example, on the weekend of the 17th October 2009, there were 683 properties listed for auction, yet the results of 440 were never provided to the Australian Property Monitors. The auction clearance rate for that weekend (75.3%) was calculated on the number of reported auctions (239 [4 were withdrawn]), but with RE agents having a choice on which properties to report, it is highly likely they would report successful auctions over ones passed in, invalidating any auction clearance rates in Victoria.
It’s quite possible property in Melbourne is coming off the boil, but with statistics like these, no one will know.
» Victorian home prices overstated – The Sun Herald, 20th December 2009