Setting places side by side
People compare the property market to see how one place or one kind of home sits against another. The habit grows out of a plain question: is this area dearer or cheaper than the next one, and does it sell faster or slower? Answering it means holding the same measures up to each place in turn, so the places are judged on equal terms.
A single sale says very little on its own, so a comparison usually rests on many sales gathered over a set period. The period matters, because a quiet stretch and a busy one can pull the same suburb in different directions. People often pick a stretch long enough to take in a range of homes, then keep it the same for every place they are lining up.
Choosing which places to compare is the other half of the work. Suburbs close to one another, a suburb and the wider city, or two areas far apart with similar housing can all be set against each other, and each pairing answers a different question.
The measures people line up
The figures that turn up most often are the median and the average. A median is the middle figure in a list sorted by size; an average adds the figures and divides by how many there are. When sales are mostly modest homes with a few very large ones among them, the two can sit well apart, so a comparison often names which one it used.
Other measures describe activity rather than value. How many homes were listed over a period, how long they took to sell, and how many sales completed all say something about how busy a market is. The figure a seller asks for is a starting point, while the figure recorded at sale shows what was paid, and the gap between the two is often part of the comparison.
The mix of homes matters as well. An area of small units and an area of larger family houses can look different on paper even when both are moving in the same direction, because the kinds of homes sold in each period are not alike. A comparison that ignores the mix can point the wrong way.
A median is the middle figure in a list sorted by size; an average adds the figures and divides by how many there are.
Where the figures come from
Comparisons rest on records somebody else has gathered: sale results, listing details, and figures put together by public bodies and by the firms that run property listings. Most people meet these figures through a website, a report or a table passed on by a friend, and rarely see the raw records underneath.
It helps to know who gathered a figure, and why. Public bodies and private firms collect their data in different ways, over different areas, and with different rules about what counts as a sale. Two comparisons of the same place can disagree for that reason alone, and the note explaining the method often settles the question.
Reading the method also shows what a figure leaves out. Some series count only houses, some include units, and some leave out sales that were not advertised. A comparison is only as steady as the ground under it, so the useful ones say plainly which sales they counted and which they did not.
Questions people ask
- What is compare the property market?
- It is the practice of setting places or kinds of home alongside each other and looking at how their sale figures, sales and selling times differ. The point is to see how one area sits against another on the same measures, rather than to judge a single home.
- How does compare the property market work?
- Someone picks the places to line up, chooses a period, and applies the same measures to each. The figures come from records gathered by public bodies or by listing firms, so the method behind them is part of the reading.
- What is usually compared in the property market?
- Common ground includes the median and the average sale figure, how many homes were listed, how long they took to sell, and how the figure a seller asked for sat against what was paid. The mix of houses and units in each place is often part of it too.
- Why can two comparisons disagree?
- They may cover different areas, different periods, or different kinds of home. One may use a median and another an average, and the bodies collecting the records may count sales in different ways.