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What does the median house price mean?

April 26, 2018 8:00 am by Upside

If you’re buying, selling, or just generally interested in the property market, chances are you’ve come across the term ‘median house price’ plenty of times before. But is it an average or something different? And what does it tell us about the housing market? Here’s what you need to know.

What is a ‘median’ house price?

Strictly speaking, ‘median’ refers to the middle. In terms of house prices, it means that half of all houses on the market are above the median price and half are below it. So, in a market with three houses at $100,000, $250,000 and $500,000, the median house price would be $250,000.

On the other hand, the average house price (also known as the ‘mean’ house price) is taken by adding up all the prices of houses on the market and dividing the total by the number of houses. When looking at three houses of $100,000, $250,000 and $500,000, the average house price would be $850,000/3 = $283,333.

The problem with the average home value is that if one or more properties are sold at a very high or low price, the average is skewed higher or lower as a result – so it can be unreliable. The median is typically a more accurate indicator of the property market in terms of overall prices and growth over time.

What can median house prices be used for?

Looking at median prices in different suburbs and cities is useful for both buyers and sellers. It helps indicate affordability across different areas, growth trends, and overall market conditions. Keep in mind, though, that it isn’t the be-all-and-end-all when it comes to assessing the market or estimating a property’s value.

Factors like auction clearance rates, time spent on the market, rental yields, number of listings, and lots of other considerations should come into play when weighing up opportunities to buy or sell.

Quarterly median house prices in Australia as at December 2017

CITY DEC 2017 SEP 2017 DEC 2016 QOQ% YOY%
Sydney $1,179,519 $1,173,741 $1,133,852 0.5% 4.0%
Melbourne $903,859 $875,819 $812,398 3.2% 11.3%
Brisbane $548,918 $552,398 $546,972 -0.6% 0.4%
Adelaide $522,815 $518,037 $505,000 0.9% 3.5%
Perth $557,567 $554,875 $571,864 0.5% -2.5%
Canberra $753,516 $717,302 $694,850 5.0% 8.4%
Hobart $443,521 $403,201 $378,088 10.0% 17.3%
Darwin $565,696 $580,951 $610,668 -2.6% -7.4%
National $813,024 $802,123 $773,993 1.4% 5.0%

Quarterly median unit prices in Australia as at December 2017

CITY DEC 2017 SEP 2017 DEC 2016 QOQ% YOY%
Sydney $736,879 $739,741 $724,308 -0.4% 1.7%
Melbourne $506,079 $492,170 $468,692 2.8% 8.0%
Brisbane $385,955 $394,639 $404,338 -2.2% -4.5%
Adelaide $315,794 $320,825 $309,517 -1.6% 2.0%
Perth $369,402 $365,708 $375,969 1.0% -1.7%
Canberra $426,124 $425,650 $424,417 0.1% 0.4%
Hobart $318,467 $321,056 $278,817 -0.8% 14.2%
Darwin $395,279 $361,583 $459,805 9.3% -14.0%
National $557,794 $555,943 $545,116 0.3% 2.3%

Source: Domain House Price Report December 2017

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If you’re considering selling your home, it’s always best to speak to a property agent who can give you an appraisal based on all the characteristics of your property in addition to factoring in median property prices in your area. Book a no-obligation appraisal with one of our agents today.