Lies, damned lies and statistics
by Geoff Grover, Coolum Beach and Mount Coolum real estate expert - July 2015
The full quote popularised by Mark Twain is “There are three kinds of lies—lies, damned lies and statistics” There is a lot of truth in this old saying as numbers can be manipulated to suit any argument.
Property prices are a classic. We get breathless announcements as to how the market moved so much last week and extrapolating this to make a major pronouncement on trends. In truth, trends can only be identified by a long term view. You will always have short term movements up and down in everything that is measured, just ask any trader of the stock market!
Let us look at house sales by year from 2010 to 2015 YTD.
We have had an increase from 2012 of 23.2%, but from 2010 only 7.7%, ie, 1.54% average per year, which is less than inflation! This is solid, but no price boom.
What is very relevant is the numbers sold, increasing each year.
The property cycle used by the serious commentators predicts that price growth always follows volume growth, a simple outcome of supply versus demand.
Increase from 2012 is 10.2%, from 2011 nothing, from 2010 0.86%.per annum.
Year to year figures are affected bysegmentation, ie more high end sales than last year, so the long term view & like for like analysis is essential.
We have had an increase from 2012 of 23.2%, but from 2010 only 7.7%, ie, 1.54% average per year, which is less than inflation! This is solid, but no price boom.
What is very relevant is the numbers sold, increasing each year.
The property cycle used by the serious commentators predicts that price growth always follows volume growth, a simple outcome of supply versus demand.
Increase from 2012 is 10.2%, from 2011 nothing, from 2010 0.86%.per annum.
Year to year figures are affected bysegmentation, ie more high end sales than last year, so the long term view & like for like analysis is essential.
Geoff Grover and the digital disruption age
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