The latest happenings in the Melbourne property market. For our Essays and The Secret Agent Report, see our Research page.

Category Archives For: Numbers and Stats

The Secret Agent Report – Property Seasonality

“To be interested in the changing seasons is a happier state of mind than to be hopelessly in love with spring”
-George Santayana

With the winter period finally coming to an end things are starting to look a lot brighter. The days are longer, the clouds are clearing and the real estate market is coming out of hibernation. It is well known that there is a seasonal cycle in the housing market. Sale volumes are higher in the warmer months and lower in the cooler months. This is a worldwide phenomenon. In this months edition of The Secret Agent Report we look at the data to test the theory.

Our cover image this month has been created by freelance illustrator and graphic designer Dan Vaughan. Dan pays respect to the four seasons by presenting fruits that come into season at the start of each of them. With a tip of his hat toward Eric Carle’s classic The Very Hungry Caterpillar, Dan’s energetic style presents the movement and change of the seasons.

George Santayana was a Spanish Born naturalist, philosopher, poet and essayist, and we identify with his viewpoint above when applied to the property market. Spring is know as an exciting time for the industry, but it’s not to say we should ignore the fruits of the other seasons.

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The Secret Agent Report


With the winter period finally coming to an end things are starting to look a lot brighter. The days are longer, the clouds are clearing and the real estate market is coming out of hibernation. It is well known that there is a seasonal cycle in the housing market. Sale volumes are higher in the warmer months and lower in the cooler months. This is a worldwide phenomenon. In both the USA and the UK, the housing market experiences above trend results for both prices and transactions in the two warmest quarters of the year. According to one study, in the UK, the difference in annual growth rates for house prices between hot and cold seasons was 6.5%. (Tenreyro, 2009)

Secret Agent decided to investigate this cycle to quantify how much seasonality influences house prices in the inner city property market of Melbourne. In the first part of this report, we analysed the results of house and townhouse sales for the last ten years in the inner city suburbs of Melbourne. All two and three bedroom townhouses and houses were included in the study if they were sold between January 2004 and August 2014 and if information about the number of bedrooms, bathrooms and land size was accurately recorded.

At a glance, there seems to be a positive correlation between the amount of sales and the average sale prices during the period. This is consistent with the notion of “hot and fast” versus “cold and slow” periods in the housing market. However, the results do not seem to entirely match what would be expected in the different seasons.

Summer was the worst performing month in terms of number of sales and average sale prices. It would be expected that since the weather is warmest during summer, if warm weather positively influences house prices then, the average sale prices would be highest in summer. This was not the case. The turn of the seasons, autumn and spring performed the best with both the highest number of sales and highest average prices. Winter did not perform as badly as expected with a significantly greater amount of sales compared to summer and also a higher average sale price. However, if you compare winter to spring, the results appear as you would expect with the average number of sales picking up in spring and prices increasing quite significantly. Overall spring was the standout season which is consistent with the general perception that spring is the best season for real estate transactions.

There are many other factors that could be impacting house prices in different seasons that couldn’t be controlled for in this study. For example, spring not only brings warmer weather, but also a greater supply of stock to choose from. Owners with better properties tend to wait until spring to sell, and properties which have beautiful gardens will be listed during spring to showcase these at their fullest. It is interesting that even though supply and demand both go up as the weather gets warmer in spring, prices also rise concurrently. In general, properties being purchased equate with properties coming onto the market on the other side of the equation. This means that the supply of properties rises alongside the market demand (though slightly later). Since both supply and demand rise, basic economic theory would indicate relatively stable pricing but interestingly the market consistently experiences a price spike as the weather begins to warm up.

The Value of Apartment Views

Some have a ‘stunning view’ on the top of their priority list when searching for a property, and others have more of a subconscious desire. Secret Agent have looked at two prestigious apartment buildings in Inner Melbourne; The Melburnian and The Hallmark, to analyse the monetary value of the different views available.

“… as the fact of our success thrust itself more clearly into my mind, I felt a quiet glow of satisfaction spread through my body — a satisfaction less vociferous but more powerful than I had ever felt on a mountain top before.”
– Sir Edmund Hillary, atop Mount Everest

This month’s cover is inspired by the ultimate view – the view of the Earth from space, and it’s ocean and atmosphere that provides it’s majestic blue hue.

Bringing us back down to Earth (but not quite to sea-level!) is the quote above from Sir Edmund Hillary, the mountaineer from Auckland, who together with Tenzing Norgay became the first humans to reach the world’s highest peak: Mount Everest.

What an incredible view to be the first to experience!

The Secret Agent Report August 2014 - Apartment Views

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The Secret Agent Report – Car Parks

What is a Car Park actually worth in the Melbourne CBD and inner city? A very important question when searching for a property (residential or commercial) is; “Does it have a car space, and if so, how many?”  Value for the individual is decided by considering many variables and lifestyle needs.

The perceived value of a car space is undeniable – even renters without a car still enquire about parking for visitors, or for a possible car purchase in the future. The option to be able to acquire a car and have a place to put it is important to a lot of people. It’s about choice.

This edition of The Secret Agent Report is about using data to connect a monetary figure to the value we already know exists in car spaces. This kind of data is becoming more and more useful as the market becomes more competitive, and space becomes more scarce.

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The Secret Agent Report July 2014 - Car Parks

Inner Melbourne Quarterly Turnover

Further meaning comes when these figures are analysed against other statistics, but for now we have used ‘area’ and ‘type of home’ to create an understanding of the past 6 months of property sales data. The area classification helps to understand the different market cultures (Inner north, east, south and west), and the house size gives and idea of what’s moving.

If there is something specific you are interested in, please email us your ideas.

Click the table below for a larger view.

16-04 SA Bulletin - Turnover

Pools – Take a Dive!

The Secret Agent Report - POOLS

To pool or not to pool? A question that has always been a hotly debated topic among home owners and renovators. This edition of The Secret Agent Report sets out to determine how much more buyers are willing to pay for houses that feature a swimming pool. Many property developers and professionals believe adding a swimming pool to a property will increase its value. However, is it worth the associated construction and maintenance costs? Ten different suburbs located in Melbourne’s inner East and South East were investigated.

Please sign up via the thinking page to receive this months report to your inbox, and don’t forget to browse the archives.

Look out for our mid month special release of The Secret Agent Report, this time looking at Downsizing.

A note on this months Cover artwork…

In this report we pay tribute to one of the kings of pool lifestyle photography; Slim Aarons. On the cover, you can see our interpretation of his iconic image of the American writer C.Z Guest and her son at their Villa Artemis, Palm Beach, Florida (1955).

Pages 3 and 5 reference Aarons’s lesser know photograph Poolside at Laguna Beach (below).


The Cubic Metre Rate

The square metre rate of a property is a very important factor – it allows a further indication of value.  This month, The Secret Agent Report investigates the volume of space – The Cubic Metre Rate – to see if there are any trends or correlations with regard to pricing.

Positive points can be given to both high and low ceilings. High ceilings allow for better air circulation and a feeling of grandeur, whilst low ceilings can make a room feel more intimate and allow for better acoustics and cheaper utility bills in some cases.

We also take a look at Inner Melbourne’s Commercial market, presenting some recent sales of interest.

Please click here to read the report, and also view the past six months of sales data for Inner Melbourne’s houses, townhouses and apartments.

In next months edition of The Secret Agent Report, we discuss the feeling you get when you know a property is just right! After a year of covering many different specific topics (such as Coffee, Vegetation, Walkability, Housing Styles and Parklands) and analysing data for countless hours, we decided to discuss the ‘je ne sais quoi’* of property.

*French: ‘I don’t know what.’ Be sure to read next months report…

The Secret Agent Report November 2013 - Volume


Street Number Superstition

Does your house number have any effect on its price? Using data from Jan 2002 – June 2013 looked at the street number and price of approximately 19,500 house sales in inner-city Melbourne. On the larger scale, it was found that there was only a slight decline in average sale price, the higher the house number (Figure 1).

Figure 1 - Distribution of price (Y) versus housing number (X). Note the concentration of sales between #0-#200 and the diffusion after #800. The red line represents the average trend line.Figure 1 – Distribution of price (Y) versus housing number (X). Note the concentration of sales between #0-#200 and the diffusion after #800. The red line represents the average trend line.

If one follows the law of large numbers, one could attribute this to there simply being fewer properties available at that end of the spectrum (Figure 2 : No. of Properties) – and that perhaps their prices would be closer to the average, and deviate less, if there were more streets long enough in inner-city Melbourne (Figure 2 : Deviation of Prices).

Street Numbers - Figure 2

Figure 2 – Number of Properties (Y-Right) versus Deviation of Sale Price (Y-Left) versus Street Number (X). Note the relationship between number of properties and deviation of sale price.

It could be said, however, that when purchasing a property a buyer could be more confident that the sale price is closer to the average price on a more common number (between 1-200) than a more uncommon number (800+). While the majority of sales were for numbers below 200, none of these sales reached the high deviation levels that were experienced by the numbers after 200. This type of study is restricted to the urban structure of the area – different rules may apply in areas dominated by longer or shorter roads. Street Numbers - Figure 1

Election 2013

With the election around the corner we thought it was timely to ask:

How do elections affect the property market in inner-city Melbourne?

Using data based on over 112,000 sales in inner-city Melbourne between January 2002 and July 2013, Secret Agent investigated the last three federal elections – 2004, 2007 and 2010.

All three elections experienced a decline in average inner-city Melbourne property prices in the twelve month period encompassing both lead-up and preceding six months of the election (Figure 1). These declines were particular evident for the 2007 and 2010 election periods when looking at the last decade of property prices (Figure 3).

It was not until six months after the elections (Figure 2) that housing prices began to fluctuate less and experience steadier, upward growth.

Looking at what has happened the last three elections, with the upcoming election in September 2013 we could see fluctuating, but declining property values over the next few months, followed by steady positive growth over the following year.


Figure 1 – 12 Month Election Period (2013 in red)


Figure 2 – 12 Month Period (starting 6 months post election)


Figure 3 – Average Monthly Sales Price, Jan 2002 – July 2013 

Auctions VS Rain

The start of this month marked the commencement of winter auctions for 2013. A running joke in the industry, is that if you’re a buyer intending to bid on a weekend auction – pray that it rains!

Auctions VS Rain


We at Secret Agent wanted to ask ourselves a very simple question. Could rain affect auction prices? Would it have a detrimental affect to property pricing?

Our initial thoughts were that it wouldn’t impact results. If a buyer was set to bid on a property, the weather wouldn’t impact the way a serious purchaser would pursue it.

However we started following some interesting research on the correlation of stock market performance and the weather, this started our quest to establish if in fact the Melbourne property market was influenced by the weather. The research mentioned was prepared by the University of Berkeley, and compared the Dow Jones Industrials and weather patterns from 1948 – 2010. The market recorded an average reduction of -2.8% on cloudy days over that time period (62 years of data).

We looked at the winter months when an auction occurred on a wet day (i.e. more than 4mm of rain) there was an average price difference of -5% as opposed to auctions that took place on a dry day with less than 4mm of rain.

This finding was compiled with 2012 sales results that occurred on a Saturday (i.e. at Auction) between June and August 2012.

Average auction result with less than 4mm of rain: $1,003,300

Average auction result with 4mm or more of rain: $956,800

-5% difference could be expected for property owners auctioning on a rainy day!

The one saving grace to this situation is that some correlations over the past decade show that prices on a whole are stronger in winter than those at other points in the year. The reason for this is the scarcity of stock in Winter. A vendor could be wise to sell in winter, but only on a dry day!