Residential property commentators are placing far too much emphasis on price, according to property advisory group Matusik Missive.
“Far too much commentary about the residential property these days focuses on price. Very little is actually said about sales,” argues Matusik Missive head, Michael Matusik. “When I first started in this game, sales volumes and especially sales by price range or group, were far more important than median or average prices.”
Matusik says nothing much has actually changed over the past 25 years; it still comes down to how many sales take place and what direction their heading in.
“Recent data releases by both RPData and the REIQ provide some information about sales volumes. But most of the conversation is about changing median values, which…more often than not means very little at all. It shows what sold rather than improvement or otherwise.”
Instead, Matusik believes a market’s position can be better determined by sales volume trends.
“A recovering market has, among other indicators, improving sales volumes. A market in upswing has ‘fast’ sales, a downturn market has flat or slightly falling sales volumes and a market in decline/trough has declining sales.”
“Sales volumes are a great bellwether when it comes to future direction of prices and a market’s characteristics, i.e. changing from a buyer’s market to a seller’s market for example.”
He says sales volumes are most useful when discussed on an annual basis and, where possible, by product type.
“All buyers should also want to know about how many sales actually take place around the price they paid for their property...I would also be interested if that market size had increased in recent years, so that I could estimate the resale market’s depth when it comes time to resell in the future.”
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