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Charles Bukowski

Trials in doing the house work

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Trials in doing the house work

April 23, 2010

Putting a price on homes is made difficult in Australia because the quality of market data is patchy, writes Jessica Irvine.

It is said that economists know the price of everything and the value of nothing. But when it comes to housing, often they know neither.

Australians have developed a voracious appetite for information on house prices, largely because bricks and mortar now represent the key source of wealth for most families.

But putting a price on this most valuable asset has proved difficult. Unlike the sharemarket, where large volumes of stock change hands every day for a transparent price, only a small part of the total housing stock changes hands each year.

In 2004, the then Reserve Bank governor, Ian Macfarlane, described the quality of house price data as ''hopeless''. Since then, the vacuum has been filled largely by a handful of private sector surveys.

The national data collection agency, the Australian Bureau of Statistics, also produces its index of capital cities home prices, but it still includes only freestanding homes - not apartments - and only does so on a quarterly basis.

The two main private providers of house price information are

RP Data-Rismark and the Fairfax-owned Australian Property Monitors. These private companies make their money by selling information to real estate agents, prospective buyers and sellers and government bodies.

They race to get the latest information out to the public and grab the headlines.

But there is an inevitable trade-off between timeliness and accuracy of the information.

Eventually, all sales are lodged with state-based valuer-general departments. But this can take up to three months. In the meantime, private firms collect sales information from real estate agents. Agents volunteer this information for publicity and sometimes in exchange for a discounted subscription to the data provider's information.

The valuer-generals' data also lacks details about the attributes of the properties sold - such as number of bedrooms - making it hard to know how much of the increased price is due to market movements or building refurbishment.

http://www.smh.com.a...00422-tfxg.html

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At least they're debating the quality of data, but it does seem a slightly schizophrenic spruik for the data providers: "they all sh*t, but these ones do the least sh*t job so everything is ok" appears to be the message. SQM gets no mention.

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