New tool in real estate game

THE Real Estate Institute of Victoria has revealed its latest tool to measure property price trends: the Residential Market Index (RMX), which will give vendors, purchasers and real estate professionals a barometer of the state of the market.

The RMX is like any other index, a number, and is different to our median price quarterly reports, which are based on sales results.

Just as the ASX200 index allows investors to understand the strength of the Australian stock market, so the RMX allows us to understand the residential property market in Victoria. It provides a current, succinct insight into real property price trends in the Victorian market covering all property types and is updated weekly.

The RMX is sitting at 119.8 as of April 14. It was sitting at 129.9 at this time last year. The second half of 2018 saw the overall price of properties in Victoria decrease by six per cent.

The data used to compile the RMX is just days old, setting a new standard in the availability of information that is truly reflective of the property market right now.

The REIV will continue to report on median prices quarterly but medians are determined by the type of properties that sell during a particular quarter: if a large number of prestige properties sell in a quarter, the median will go up even if the local market is stable.

The REIV developed the RMX in consultation with experts including the Reserve Bank of Australia and Deakin University and uses a similar methodology to the Australian Bureau of Statistics (ABS) Residential Property Price Index.

The current RMX Index reference period is 2016 = 100.0 to match prices with the most recent ABS census data. This means that the weighted average of property prices in 2016 was given a value of 100.0 and price movements over time are relative to this “base” reference period.

In simple terms, the current RMX value of 114.1 means that properties in Victoria at the moment are worth 14.1 per cent more than they were in 2016.

The REIV collects its data directly from our members; it is not subject to assumption or internet research. The REIV collates more than 90 per cent of all auction data each week; we believe we have the most reliable real estate reporting in Victoria.

You can find at the RMX at reiv.com.au/property-data/rmx.