When looking at the property market, it’s easy to focus on the widely reported property median prices as a gauge for market trends. While medians can provide some context, they often mask crucial details about true market potential. For buyers and investors, taking median prices at face value can lead to misunderstandings and missed opportunities. Here’s why property median prices alone don’t tell the full story—and how an expert buyer’s agent can help you understand the bigger picture.
Property Variety Impacts Property Median Prices
The types of properties selling in a suburb vary significantly, and this impacts property median prices. A single area might have a mix of older, unrenovated properties and recently built, higher-end homes. Some years, more of the lower-priced homes sell, which can push the median down. In other years, a trend of selling higher-end homes can lift the median, even if the underlying market isn’t showing true growth.
Relying on property median prices alone can therefore mislead buyers and investors, causing them to mistake shifts in the type of property sold for real market trends. Property Wizards has helped clients look beyond medians to focus on properties that align with their goals, rather than basing decisions on potentially misleading averages. An expert buyer’s agent is essential in these cases to assess which numbers reflect actual market growth.
How Gentrification and Upgrades Skew Price Medians
Gentrification is another factor that complicates property median prices. Some suburbs experience significant changes as high-quality homes, new developments, and upgraded amenities replace older housing stock. For instance, a suburb like Fitzroy in Melbourne has undergone extensive transformation over the years. Once known for its more affordable homes, Fitzroy now has high-value, modern properties with high-end finishes and luxury features.
In such areas, property median prices may show significant growth due to these newer, high-end properties. However, this doesn’t necessarily reflect increased land values or an overall surge in market growth—it’s simply the result of more expensive homes on the market. Buyers who rely too heavily on the median might assume this growth is permanent or assume the entire suburb has increased in value. But without accounting for these changes, they might miss the actual factors contributing to sustainable, long-term market growth. An expert buyer’s agent can guide you in recognising which trends in property median prices are due to genuine growth versus superficial changes.
The Real Risk of Focusing on Building Quality Over Land Value
While luxury renovations and quality finishes can elevate a property’s price, it’s important to remember that buildings themselves depreciate over time. What appreciates in value is the land on which a property sits, provided there is demand for the area. For long-term growth, land value remains the core indicator. High-end builds or upgrades may add initial value, but they tend to depreciate and require ongoing maintenance.
For instance, buying a brand-new or top-quality home as an investment may bring you a good rental return, but initially, the building may depreciate faster than the land growth, resulting in a drop in overall worth. Over time, if the land doesn’t appreciate, the property’s long-term growth potential is limited. Knowing how to separate land value from the building itself is key to making informed buying decisions.
Why Annual Medians Can Lead to Missed Opportunities
Another issue with median property prices is that they’re typically calculated as an annual median. This means the figure reflects the middle price of all sales within a given year for that suburb, not just recent sales. In a rising market, the annual median can lag behind current market prices, showing a lower figure than what properties are actually selling for right now.
So, if you’re making offers based on an annual median price, you may find yourself outbid by buyers who understand the current market values. Buyers who don’t realise this can miss out on properties, especially in competitive markets where prices are increasing month-to-month. By understanding how annual medians work, you can make offers that reflect true current prices rather than outdated averages.
How an Expert Buyer’s Agent Brings Clarity to Market Data
Rather than just relying on general metrics like property median prices, Property Wizards provides insights based on what truly drives growth. We bring extensive local knowledge and data to evaluate which properties offer genuine long-term market potential, avoiding the pitfalls of relying on skewed metrics and misleading trends.
An expert buyer’s agent understands the key market drivers, demographic shifts, and property features that contribute to sustainable growth, helping clients make decisions based on reliable data rather than solely on property median prices.
Final Thoughts
Property median prices can be useful for general market context, but they don’t capture the full picture. To truly understand a property’s potential, it’s essential to look beyond the median and examine the actual forces at play in the market. Contact an expert buyer’s agent at Property Wizards to ensure you’re basing your property decisions on reliable data and insights that reveal real growth potential.
Make your next property move an informed one with expert guidance from Property Wizards. Contact us today!
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Established in 2004, Property Wizards works with local, interstate and overseas home and investment buyers seeking to buy property in the greater Perth metropolitan area. Property Wizards takes away the stress of buying property and saves you time and money. Regardless of market conditions, our research, knowledge, and access to silent sales means we find and negotiate properties with potential to outperform the market in capital growth and rental returns. Importantly, we provide home buyers and property investors with the same level of representation that property sellers have benefited from for years.
