Our submission to the Minister for Consumer Affair’s Property Market Review.
Property Market Review
Prosper Australia has concerns surrounding both the privatisation of real estate data, the inaccuracy of statistics and the practice of staging lot releases in large, master planned estate developments.
At present, data gaps favour the real estate industry and have placed consumers in an inferior position. As buying a home is often the largest financial decision of our lives, access to relevant, timely market information is crucial.
Property Market Data
Over the last decade the development of digitised records has allowed a new level of insight into how the real estate market operates. In what has been called a “property data gold rush”, private service providers have moved to either quickly seize market gaps, developing their own data sources into a publicly amenable data stream, or have benefitted from the privatisation of once public data. Insiders with deep pockets have secured a first mover advantage.
For an independently funded civil society organisation like Prosper, the high costs of data deters us from undertaking research that is in the public interest. For example, in order to study the relationship between the rate of residential vacancy and rental prices, Prosper required two core datasets. Water usage data is provided by the major water utilities. Rental price data was purchased from SQM for several thousand dollars.
Routine property data requests regularly cost $4,000 – $6,000 from providers such as Core Logic. If this cost is sufficiently high to deter a university research body or NGO from regularly engaging in such purchases, we can only assume that it is too high for the average consumer wanting to understand regional or macro trends in a particular market segment.
This unequal access to property market data is exacerbated by the overwhelming presence of banking economists, real estate industry commentators and lobbyists portraying their particular view in the media.
Unlike the average homebuyer or renter, sophisticated property investors have a substantial profit motive to invest in market data and plug it into the latest proptech software-as-service platform. When embellished with data on demographic growth, infrastructure plans, and cultural development, these tools can provide a comparative advantage over other investors, let alone the consumer. Thus the property data gold rush.