In property investment, understanding price trends is key. While the Median Price has been a popular metric, it can sometimes present a misleading picture, especially in smaller sub-markets. This blog explores why Typical Price is a more accurate alternative, especially when assessing suburb-level investment opportunities.

Why Median Price Can Be Misleading

Median Price has long been a go-to measure, widely reported by media and property data providers. It gives a snapshot of property prices by representing the middle value in a sorted list, helping avoid skewed results from high outliers that could affect the Average Price. However, Median Price has limitations, especially for sub-markets where fewer sales can cause dramatic swings, potentially leading to misinterpretation.

For example, in major markets like Sydney and Melbourne, the median shows clear trends, reflecting the overall market well. However, suburb-level markets can have diverse trends—some rising, others falling—that a single median figure can't fully capture.

There are markets within markets, within markets, within markets…

Understanding Typical Price: A Better Alternative

To address the limitations of Median Price, we have developed the Typical Price metric. Derived using data-fitting techniques, Typical Price recalculates monthly to reflect the latest trends, giving a more precise view of specific markets over time.

Data fitting involves testing various mathematical models to find one that best represents the data. This process makes the Typical Price metric both accurate and adaptive to market changes, offering a more stable measure than the Median Price, which can swing due to fewer sales or varied property types within the area.

In simple terms, data fitting is like trying on different sizes of a shirt until you find the one that fits you best.

Conclusion: Why Typical Price is Essential for Investors

The Typical Price metric not only provides a more realistic view of property values but also represents a step forward in data-driven property market analysis. It offers a refined look at sub-market trends, evolving monthly to give a true picture of what’s happening in real time. By using Typical Price, investors can navigate the property market with more accuracy and make better-informed decisions.