The recent surge in cheap apartments in Auckland is skewing the statistics even more.
I feel that a much more useful measure of house price inflation would be the percentage change in the price of the same (representative) house from one year to the next.
If this new measure for house prices was used, you would find that Auckland is still experiencing huge house price inflation.
A. Your reasoning sounds so reasonable. But I've got two problems with it:
* Despite the growth in apartments, the average size of new dwellings including apartments has been increasing.
* Gathering data on a single house could be terribly misleading.
First, dwelling size. The average has grown from 146sq m in the 1970s to more than 200sq m since 2000, according to mortgage banker Cairns Lockie.
These days, we expect houses to have a family room as well as a living room, two or even three bathrooms and/or toilets, a walk-in double garage and so on.
What's more, the average cost of building a house has risen from $703 a sq m in 1990 to $935 in 2003.
That's about half a percentage point more than inflation each year.
When both the price a square metre and the number of square metres rises, the price of the average new house must rise strongly.
Admittedly, section size has probably decreased, partly because of subdivision. But I doubt if that would outweigh bigger and more expensive new houses.
If we adjust for that, we could well find the opposite to what you say - that the value of the average existing (non-new) Auckland house has risen less than the median figures suggest.
After all, new houses make up quite a large proportion of total house sales, but a much smaller proportion of all houses.
As for monitoring the price of a single house, which one would you choose? The choice of suburb and dwelling type would make a huge difference.
And how would you adjust for maintenance? One year, the owners might spend nothing on maintenance, the next year many thousands. You would have to allow for a certain amount, to reflect average maintenance spending on all houses. But how much is that? That's another data-gathering problem.
Perhaps hardest of all would be establishing the value each year. Valuations, as we all know, are sometimes way out. And they would tend to be based on the very data, on median prices, that you don't like.
Median prices aren't perfect, but they're the best we've got.
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Q. Most house sellers seem to opt for a sole agency, thereby locking themselves into high fees and advertising costs, as well as limiting the pool of potential buyers.
In our experience multi-listing can provide an acceptable alternative. We sold a family property south of the Bombay Hills two years ago, when sale prices were pretty much set by the then current Government valuation (about $520,000 in our case).
We listed with some seven local agencies, and also advertised on our own account through three websites and an Asian weekly newspaper.
Some of the agencies worked quite hard on our behalf, contributing advertising money and holding open days. We had two or three offers through agencies around or slightly above the Government valuation.
In the end our own advertising sold the property for $640,000 (23 per cent above Government valuation with no commission to pay).
The point is we felt that all agencies had a fair opportunity to sell the property, that we tapped a wide spectrum of potential buyers, and came out of the deal satisfied with the overall marketing effort.
A. I've just received, in the mail, a copy of a booklet called 18 Costly Mistakes Made By Home Sellers, and one of them is multi-listing.
"You may think this will increase your chance of finding a buyer," it says. "But it decreases your chance of getting the highest price.
"The agents will be in a hurry to sell your home before another agent sells it. The sale will be most important. The price will be forgotten."
Who's saying this? An Aussie outfit called The Jenman Group - "promoting ethics in real estate".
A Napier man who says his real estate firm will soon be the first Jenman-approved agency in New Zealand sent me the booklet. So it's easy to dismiss the comments as self-interest.
They do, however, make some sense - as do other items in the 18 Mistakes booklet, which includes warnings about auctions, advertising, open homes and so on.
All of this can be downloaded, or requested, from
