Australians are treated like dummies when it comes to data

There is certainly a strong argument against the way in which data is delivered in Australia, given the choice is to bundle data collected as this paints a worse positioning – such as “Sydney house prices” where this data is totally irrelevant.

If all the Sydney house price data were to be broken down into the 18 regions (which should happen) then the data would hardly raise an eyebrow given it would identify minimal changes. Having said that, it would not create a headline as profound as “Sydney house prices” which further explains why defective data is often the preferred weapon of choice in mainstream media.

Last week I wrote why the Reserve Bank of Australia (RBA) should be trialling different cash rates across Australia given we have some demographic markets booming and others in serious decline. Which gets one thinking on how the RBA managed before we had today’s available technology to produce such amazing data.

RP Data produced this week one of the most amazing data releases that the Australian real estate industry has ever before seen - a quarterly assessment of realised gross profit based on dwelling re-sales over the March quarter of 2014, released June 2014.

“Over the first quarter of 2014 RP Data recorded 64,518 residential property re-sales nationally. The gross value of the losses associated with these loss making re-sales totalled $381.1 million. Conversely, 90.2% of all March 2014 quarter re-sales recorded a gross profit relative to their original purchase price. The gross profit from these re-sales equated to $12.2 billion.”

Source: RP Data.

“Lifestyle regions continue to show the largest proportion of loss making re-sales, particularly within the unit markets as opposed to the detached housing markets. Queensland’s Wide Bay region has recorded the largest proportion of loss making re-sales with 30.6% of all March 2014 quarter re-sales transacting at a price lower than what the home was purchased for. It is important to note that while loss making re-sales remain a high proportion of the market, in many of these regions the proportion of these sales is now trending lower.”

It would be fascinating to see what would happen if an area such as Wide Bay had a much lower cash rate that would further entice buyer interest?

Source: RP Data.

Again,  we see Sydney listed on its own despite it having approximately 18 regions, so I don’t exactly understand why Sydney is not broken down into regions. If you are searching to buy a home nobody types in Sydney as their keyword search. It would be even easier to break this data down further by postcode results which would then deliver exacting data results.

Just in the last week we have seen Darling Square in Sydney sell out, which is an amazing result given it is a 40 storey tower so 357 apartments selling in just a few hours is unprecedented.

Then again, just a few months ago the first stage of the Barangaroo development also sold 159 apartments in a few hours – and it should be remembered these all sold at the asking price. One must wonder, just what effect the House of Representatives inquiry into foreign investment of Australian residential real estate played in these sales as it continues to unveil massive loopholes. Already it has been revealed that the Foreign Investment Review Board has failed to police those properties purchased by temporary residents who must sell within three months of departing Australia. Like hello, why would you sell when there is no watchdog?

Then a senior Bureau of Statistics official revealed this week they read trade magazines and newspapers to keep on top of the amount of foreign investment in Australia’s residential property. The sad reality is that the government has absolutely no idea what is happening here, although every sale in Australia attracts stamp duty, so they are yet to work out how to collate this data even though the answer sits directly in front of them – our data dummies.

Given this is happening via many loopholes, there is absolutely nothing the Australian government can do until they pass legislation which puts an end to these practices. In the meantime the inquiry continues and, as many of us predicted well before, foreign investors have clearly outsmarted the Australian government. If proven correct, one can safely assume there will be a buying spree if, and when, the government decides to act on this.

NSW and Victorian governments recording record stamp duty receipts obviously flew well under their radars – although not for property observers.

The data is clearly there although for some strange reason when it comes to analysing data we are seeing plenty of dummies.