Telling the story
According to Dr Mardiasmo, having access to raw data means that agents can create stories that are useful and relevant.
“The median prices we see reported in the media and online are a snapshot in time,” she said. “By looking at the raw data, you can tell a bigger story. What was happening in the market a week ago, a month ago, three months ago, last year? What price movement has there been on a historical basis? For example, five to 10 years ago.
“And by looking at the data from a historical perspective, you can start to piece together the events that have impacted the market. For example, prices may have dropped at a certain point in time because of a flood or bushfire. Or prices may have increased because of the introduction of a new government grant.
“Importantly, you can see trends and can paint a holistic picture for your clients about the market – both in a current and historical context. This is important, as for many clients buying the home they’re going to live in or invest in tends to be a long-term proposition.”
When it comes to telling a story about what’s happening overall in your local market, Dr Mardiasmo said you need to bring different data sets together.
“It’s useful to think of different data sets as different parts of your body,” she said. “Think of it like this. The median price is your torso, the number of transactions is your right arm and capital growth is your left arm, and vacancy rates and weekly rent are each of your legs.
“Just as you need each body part to come together to form a complete person, so too do you need each data set to tell a complete story about the market.”
Dr Mardiasmo explained that it’s only when it all comes together – when you marry together different data sets – that you can truly advise your clients about the nuances of the market and arm them with the knowledge they need to make a truly informed decision.
“Yes, the median price may be extremely low in a particular suburb, but if capital growth is low and the vacancy rate is high, it may be better to buy in a suburb with a slightly higher median price, where capital growth is high and the rental market is tight,” she said. “It’s all about giving people all the information they need to make the best decision – and one that will give the most bang for their buck.”