House prices are falling – somewhere else

$965K Carey Bay NSW

The politico-housing complex relies heavily on poor quality data to hide the market price of houses from innocent low-information citizens. It has this market knowledge at its fingertips – but is determined not to share it with the likes of you and me.

Most of the touts working in RE sales would be unemployable without this deep flaw in the system, and they know it.

In the share market, up-to-the-second price and volume data is available to everyone. Meanwhile, the land market – bigger, deeper and more important in every way – is totally ‘gamed’ by spruikers spouting charming but misleading anecdotes and snippets of information, merely to foster ‘confidence’ and keep the mammoth Ponzi scheme going – even in a falling market.

Let me show you how.

A month ago, the Herald Sun wrote about price falls in Melbourne:

“House prices in South Yarra, Hawthorn East and Malvern East have fallen 28 to 38 per cent.

“More affordable areas including Bayswater, Braybrook, Croydon North and Macleod have also been hit hard, with median price falls of 23 to 27 per cent.

The Herald Sun helpfully shows price changes in 10 selected suburbs in prestige, middle, modest and budget price ranges.

Just a moment. 28 of the forty suburbs listed had less than 30 sales in the quarter. The REIV deliberately gave the Herald Sun statistically unreliable statistics.

We are offered the tiny statistical area Heidelberg Heights, rather than statistically significant Heidelberg; Watsonia North rather than Watsonia; Fawkner not Coburg; Donvale not Doncaster; Oak Park not Glenroy; Caulfield South not Caulfield.

Why? Because it is deniable. The big price shifts can be attributed to small statistical samples rather than the real reason: Melbourne-wide price falls. The RE machine is kicking the can down the road hoping against hope prices will bottom and they can move to a new narrative, that of ‘bargains’ bought and gains pocketed.

You may think this assessment harsh. Let me give you another example.

On today RP Data’s Cameron Kusher is out with the Ten Worst Hit Areas – the biggest falls in median house prices in 2011, with flood-damaged Ipswich suburb North Booval the most discounted at -46.3 per cent to $154,000.

What a relief! Floods caused the worst price fall. (Letting developers subdivide flood-prone areas makes my blood boil, but that is a subject for another time.)

Also in RP Data’s Ten are Mittagong NSW, Jolimont WA, Carey Bay NSW, St Kilda West Vic, Port Augusta SA, Golden Beach, Rainbow Beach, Acacia Ridge and Eagle Farm all QLD.

Jolimont WA has a population of 1007 and shares the 6014 postcode with Floreat, Floreat Forum and Wembley.

Postcode 2283 has 9369 dwellings and Carey Bay (-42.6%) is one of 15 place names in the postcode.

St Kilda West is a narrow sliver of about 1500 dwellings North West of St Kilda.

Get the picture? Tiny samples make for deniable statistics.

In some ways, the data providers are quite accurate: house prices in these areas have fallen 40 per cent plus. They probably fell a little more than the wider postcode areas. I say the differences are very minor and point to widespread corrections – after all, home buyers would happily shift their interest across one suburb for a 40 per cent saving. The private data collectors aren’t telling. When the accurate ABS data arrives 7 months late, the house price story will have already moved on. Or down.


  1. AB13-03-2012

    St Kilda West is a classic example – it’s been referenced by The Age many times with completely invalid figures, both for price increases and decreases.

  2. Richard Bean13-03-2012

    Numbers 9 and 10 on the Kusher list are classics – try going to and buying or renting a unit in Acacia Ridge or Eagle Farm – and turn off the “surrounding suburbs” search.

    Acacia Ridge – you can rent a unit 1090 Beaudesert Road or (in the past) 80 Oswin St. That’s two addresses. Ask anyone who lives there – the whole suburb is zoned low density residential – pink at

    Eagle Farm – there are no units – in Hamilton maybe, but not Eagle Farm.

  3. Confused FHB13-03-2012

    And yet Chris Joye says prices have been rising since January through to mid march.

    See here…

    House prices surge in Q1 2012

    What gives? So much conflicting data!

    Confused FHB.

  4. James13-03-2012

    While all this spruiking is very annoying, I’m really starting to think they’re fighting a losing battle. They just keep calling it don’t they. They called the bottom every quarter last year, and every quarter prices fell. If they continue to do it so consistently and so predictably, they will only run out of what little credibility they have left (in the eyes of some). Especially if they continue to back up their assertions with completely bogus figures that are then refuted by ABS data. I was almost going to say they’re like the little boy who cried wolf, but then realised they’re not crying wolf at all; they’re more like the boy that cried “puppies” as a wolf-pack surrounded the village.

  5. Matthew M13-03-2012

    Why does the term The Fog of War, come to mind?

    Great article, thanks David

  6. Serenco14-03-2012

    It is similar to the US where every quarter of the last 5 years have seen the RE industry call the bottom, and everytime they are wrong

  7. Mike14-03-2012

    I love all the recent articles that show how property has moved over a ten year period. Not as many about how it’s moved in a 3 year period.

    Timing is crucial to first home buyers. If you have a 10% deposit and prices fall 5% you’ve lost half your deposit.

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