by. Enzo Raimondo, CEO domain.com
There are many specific terms that are used to analyse and comment on the property market. Having an understanding of these terms them is important for anyone looking to enter the market as a tenant, owner-occupier or investor. Over the next few weeks, the Real Estate Institute of Victoria will cover key terms in real estate.
The median value is the middle price in a series of sales where half the sales are of lower value and half are of a higher value. For example, if 15 sales are recorded in a suburb and arranged in order from lowest to highest value, the eighth-placed is the median price.
Medians are used rather than average prices because they are unaffected by a few unusually high or low prices, making them a more accurate indicator of true market activity.
The vacancy rate. The REIV surveys member agencies to build a register of the percentage of private rental homes that are vacant. The vacancy rate is simply the number of vacant rental properties that an agency has on its books divided by the number of rental properties they have. For instance, if an agency has 100 rental homes on its books and five are vacant then the vacancy rate is 5%.
The vacancy rate is a general measure and it may be the case that the vacancy rate is higher in one suburb than another. It may also differ depending on the type of property.
Next week we will cover the clearance rate and the owners corporation.
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