Week 18, 2020: Stop using suburbs

Week 18, 2020: Stop using suburbs

What’s the problem with suburbs?

Sales volumes are down in 2020 making what was an existing problem even worse. By not having enough sales, our sample sizes are just not reliable enough to use in many cases.

You have probably seen the same ‘top performing suburbs’ as I have. More often than not, the suburbs have very few sales and are extremely heterogeneous. When you plot the sales in a price distribution, what we expect to see is something that looks a bit like a bell shaped curve. But for most of these ‘top growth suburbs’ they are not.

Right now the median average volume of sales per suburb (counting across 10,700 suburbs and including a lot of zeros) is just 1 sale per month. Usually we cull the ones with too few sales from our lists and focus on what we consider statistically significant.

But when it comes to measuring price growth, maybe it is time for Australia to switch up a gear and look at what the Australian Bureau Of Statistics call a Statistical Area level 3 (Sa3 for short).

Download the full report.

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