Residex

What is Residex?

Residex is a statistical company that is independent of Government bodies, developing companies and real estate agents. This ensures that the information you receive from Residex is not biased in any way.

We analyse actual, legal sales in order to give our customers an accurate, informative and comprehensive understanding of the residential property market.

Where does your information come from?

We buy most of our sales data from government bodies in the various states and territories of Australia.

The rest of the information that we provide in the form of statistical data, literature and advice is put together from our own analysis of the sales data we collect.

How do I get your information? Do I have to subscribe?

Our information is available to the general public. You have the choice of

• Ordering one-off reports. This includes the Top 100 Postcode Predictions, Best Rent Opportunities, Postcode Explorers and House Price Explorers. When you purchase these reports, you will receive a one-off report with Residex latest information. However, to get the next quarter report, you must pay the fee again.
• subscribing to the Residex Report (formerly known as the Residential Property Return Report). You can purchase a single copy of this report for $90.00, or receive four quarterly reports for $300. This subscription also includes a September Subscription Supplement, which provides a suburb-by-suburb analysis, rather than the usual postcode analysis.
• Subscribing to Market Facts. This will give you access to our sales and statistical data for a whole state. This software is ideal for real estate agents, mortgage brokers, investors, researchers and valuers.

How up-to-date is your information?

As far as sales data goes, you need to consider the following process in the sale of a property.

1. The contracts are signed and dated
2. Usually 4-8 weeks after the contract is signed, the property is transferred (or settled).
3. The contracts are processed by the Government Department, taking 4-6 weeks.

This is the typical scenario. However, if you consider a property that has been purchased off-the-plan, there is sometimes years between the contract date and the transfer date. There are many possible explanations for why an expected sale is missing from a list of sales and time-delays are the most common cause.

To compensate for delays in settlement, we have call centres operating to collect sales information from real estate agents as sales take place.

I have ordered a list of sales and a sale I was expecting to appear was not there. How could this be?

While we are collecting some sales from real estate agents as they occur, a significant proportion in some states cannot be collected in that manner, and hence it can take 6-7 weeks to get the majority of our sales data. However, some sales may take longer than this.

This is due to the fact that there is no definitive period between the sale and contract dates, and there is no law that determines how quickly a contract should be passed in to the Valuer General's Department.

Off-the-plan sales, extended settlements, sales in large complexes and regional sales will usually take longer than the 6-7 week period.

Other reasons that the sales data may not appear include:

• The property being listed under an alternative address, especially in the case of units, which may be listed by their lot number rather than door number
• If the property was auctioned, the sale may not have been finalised and therefore we would not use the figure.
• In rare cases, the sale has not been entered correctly at data-entry level, and so there is not enough information for us to supply it in a list

I'm interested in vacant land. What report can I get?

Unfortunately we do not calculate capital growth for vacant land, but we will have vacant land sales. Call our office on (02) 9954 1199 during working hours to organise a report that's suitable to your needs. Alternatively, send an e-mail through to retail@residex.com.au with your request.

The property I'm interested in is a duplex/townhouse/villa, not a house or a unit. Which report do I buy?

These properties are interesting because they fall into a sub-category as far as our analysis goes.

We classify a unit as being numbered like 1/22 or 3/246, whereas a property numbered 2a or 344d would be classified as a house.

Because a townhouse has land attached to it, it grows more like a house, but the comparable sales for the property may be in the units report. Call our office on (02) 9954 1199 or e-mail retail@residex.com.au if you are looking at a detached dwelling.

In the sales list I bought, not all the properties have bedroom counts and land sizes. Why is this?

There's a multitude of data supplied by the Government bodies other than the address and sale dates and price. Unfortunately, it's not necessarily supplied consistently. Some sales have such information supplied. Others don't.

We are constantly updating our collection methods. If you would like to make sure that our records of your property are correct and even that we have the photo of your property that you would be happy for others to view, you can send us an email at info at residex.com.au.

Where does your rental data come from?

There is no official body that provides rental data, so as with bedroom count data, we are forced to use a variety of other sources to obtain sample rental information and then use statistical methods to extrapolate this information as much as possible.

We use the advertised rents from such sources as newspapers, so the rental amount may be a little bit more than in reality.

Do you have any information on vacancy rates for rental properties?

Unfortunately, no.

The historical capital growth figures in the report I bought are different from those provided by other sources. Why is this?

Firstly, it is very important in statistics to make sure you are comparing the same things.

Residex uses 'the repeat sales method' to calculate capital growth. Normally, people will quote 'the change in median sale price' as the capital growth for an area.

However, the change in median sale price is not reflecting the change in the value of property, but really the changing in buying patterns.

So if in one quarter, there were many property sales at the lower end of the market and in the next quarter, there were more sales at the high end, this would show a large increase in capital growth.

Calculating capital growth in this way can mean that some sources come up with capital growth figures of 100%! This is not necessarily an incorrect figure, but it cannot be applied to calculate the current value of properties in an area!

How does Residex calculate capital growth?

This is complex. An article written by Dan Liebke (Residex's Director of Statistics) gives the best explanation as to how we calculate capital growth and why we use it.

There are some percentage growth rates in this report. Are these growth rates simple or compound interest?

Compound interest. We will always quote growth rates in compound terms. That is, growth is calculated on top of previous growth.

How do I predict my property's future value?

You can calculate your property's predicted value using our growth rates and this equation.
I = Property's current value in $
t = time in years
r = the predicted growth rate in % per annum, as quoted in your report
P = the property's value in $ after t years

P = I x [1 + (r/100)]^t

So a property valued at $100 000 now, in a postcode that has a prediction of 10% pa for the next 8 years,

P = 100000 x [1 + (10/100)]⁸

The property's value in 8 years time will be ______________

My report is showing negative growth! Is there even such a thing?!!

Contrary to popular belief, the property market in some areas of a city will experience negative growth from time to time. However, research shows that in the longer term, house prices will present positive growth.

What is a median sale price?

The median sale price is found when you list all the sales for a particular time period in numerical order. The value in the exact middle is the median. For example, of 1,2,3,4,5 the median is 3 and of 1,2,3,4,5,6 the median is 3.5

Residex use a median value instead of a median sales price. How do you come to this figure and why do you use it?

An article written by Matthew Hodge gives the best explanation as to why we've changed to using the median value.

In this comparable sales list there's a sale that looks too high (or too low) to be real. What's going on?!

As mentioned in a prior answer, we receive all sales from the appropriate Government body. This includes partial sales (eg. from divorce settlements), which account for the majority of the strange-looking low prices. There are also occasional strange-looking high prices. These are usually the result of a human or computer error when the price was initially processed by the Government body. If you find a sale that seems unrealistic, simply disregard it.

I've purchased a Property / Postcode Explorer for Victoria, and it doesn't have the sales date and sale price for every record. Why is that?

Due to Victorian privacy regulations, we are not allowed to supply the actual sales date or sales price of the property for government data. However, we do have these records on our system. What we do instead, is index up the sales price using the average capital growth for the postcode to give you a current day estimate of each property's value. Because the sales are no more than 18 months old, this system is a very reliable way of getting comparable sales for Victoria. Some of the sales we have in Victoria do not come from government, and in these cases we supply full information.

I see you have a newsletter I can subscribe to. But if I sign up, will I be spammed, and will my details be passed on to other companies?

Residex sends out a newsletter monthly, giving you updates on the latest reports and also some interesting articles by our statisticians. We occasionally send out a special internet only offer, exclusive to our subscribers. Residex will not pass any of your details on if you order a product from the Residex site.

Can I come into your office to speak to John or a consultant?

Unfortunately, we are not set up to handle consultancy yet. We are still a small company. We have created all our reports to enable you to make your own informed and independent investment decisions, using reliable and accurate data.

Can I come into the office to have a look at the reports?

Our offices are not really designed for walk-in customers. They are working environments. This is why we have provided sample reports for you to view on the website. If you have any more questions about the reports, send an e-mail through to retail@residex.com.au and someone will help you out.

How long do I have to wait for my report?

Whenever we can, we send out "electronic" reports within 15 minutes. There are some exceptions; if you order a Property Explorer report where we don't have a previous sale, it has to be checked by a retail staff member before it's sent out. Most of our reports come out within one working day. Other reports have to be done manually by one of our statisticians, and therefore will take longer. Either way, we will always try our best to get your report out to you as efficiently as possible. Note that the Best Rent report is not available for email delivery.

How accurate is the initial estimate you provide in the Property Explorer report?

Quite a few people are confused by this figure. This is not the price that Residex places on your property. It is not a definitive answer. This figure may be useful, but you need to consider its context. The figure is calculated by taking the most recent past sale of the property and then indexing it according to the capital growth we have calculated for the postcode. This is putting the past sale into the context of today. However, this assumes that

• The property has not had renovations or been modified since the past sale
• The house sold for the right price when it was sold (i.e. a divorce settlement would give you an incorrect initial estimate)
• The property is typical of the properties in the postcode and would thus have a similar capital growth rate.

Do you produce a report that compares your previous predictions by suburb against current information?

At the moment, we do not produce any regular report that compares predictions to actuals for the simple reason that we have not been producing predictions long enough to get a sufficient data set to make such a comparison. For example, to properly assess the accuracy of five year predictions, we need to wait five years to compare what we predicted with what actually transpired in the market.

Furthermore, to get a robust feel for the accuracy of the methodology when tested in this way, we would ideally like to perform these tests over several prediction samples, rather than just rely on the result of one particular quarter's set of predictions.

We have only very recently reached a position where we can begin comparing predictions to actuals. Our initial testing on these areas shows that we generally under-predicted the growth in the market by an average of around 2% per annum. However, this result may change as we compare against periods that did not show the very large growth of the 2000-2005 period. We intend to wait until we gather a longer data set before we release any reports into their accuracy.

At that time, the report will be made generally available.

I tried to read my Property Return Report with the Report Reader program but it wouldn't work on my Mac computer!

Unfortunately, the Report Reader will only work on Microsoft Windows-based computers. So if you are ordering a Property Return Report, a Top 100 Postcode Predictions or The Best Rent Opportunities Report and you do not have a computer that is running Microsoft Windows, you will need to order a hard copy of the report.

I’ve just bought a new computer - can I download my reports again?

We only keep the reports on our server for a limited time - a few weeks at most: you need to keep your own backups of the reports once you have downloaded them. If you need to re-register the reports you have bought and downloaded, you can call the Residex office on (02) 9409 0333, and we will do our best to help.

What is MarketFacts?

MarketFacts is software that can give you access to our sales database for either a whole state or a region and also access to our statistical analysis for a whole state. For more information, see our Market Facts page.

How do I order a report?

You can order a report online with your credit card, or send in a cheque with your request. We will need to receive payment before the report is sent out to you.

What is your refund policy?

We are not able to offer refunds at all, so please make sure you have viewed a sample of the report and read all these FAQs before ordering. If you are hesitant about any feature of a report, please call our office on (02) 9409 0333.