Mandurah still very affordable : REIWA debunks 'clumsy' survey |
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Written by REIWA Press Release
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Monday, 21 January 2008 |
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The Real Estate Institute of Western Australia has questioned the methodology and sales figure used in a recent international survey which claims Mandurah to be the most unaffordable city in Australia.
REIWA President Rob Druitt said the survey method was based on 'multiple medians', meaning affordability was measured by dividing the median price of homes in an area by the median income in that area.
"This methodology is highly likely to produce skewed and misleading results in areas where there is a high proportion of retirees and holiday homes," Mr Druitt said.
Mr Druitt said that Mandurah's significant number of low and fixed income retirees would impact on the results of the international survey and produce a wonky result.
"The reality is that most retirees own their home and live comfortably on a modest, mortgage-free income. It does not mean that Mandurah is unaffordable," Mr Druitt said.
Mr Druitt also said the median price for Mandurah used by the survey firm was wrong and did not match REIWA data.
"Despite the survey company saying it used REIWA data, they are wrong to say the median price in Mandurah is $455,000.
"In fact, REIWA data for the September quarter shows Mandurah's median to be $424,000. This is a disparity of more than $30,000 and raises further questions about the survey's accuracy," Mr Druitt said.
Mr Druitt said that while Mandurah prices had grown significantly over the last five years, prices declined for three quarters in a row last year as it underwent a local market correction.
"Mandurah slipped backwards quite a bit last year, however the opening of the new train line is producing lots of anecdotal evidence that the housing market in this regional city is now picking up again," Mr Druitt said.
According to REIWA data, Mandurah has averaged 24 per cent growth each year for the last five years, leading up to the September quarter 2007.
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