The foundation skills in data analysis

Running head: FOUNDATION SKILLS IN DATA ANALYSIS
Foundation Skills in Data Analysis
Name of the Student
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FOUNDATION SKILLS IN DATA ANALYSIS1
Table of Contents
Memorandum...................................................................................................................................2
Report: Analysis of house prices in the suburbs of Melbourne.......................................................5
Executive summary.....................................................................................................................5
Introduction..................................................................................................................................5
Discussion....................................................................................................................................6
Conclusion...................................................................................................................................9
Bibliography..................................................................................................................................10

FOUNDATION SKILLS IN DATA ANALYSIS2
Memorandum
To: Paul Anderson
From: Emma Thomson
Subject: Analysis of Kingfisherbay’s housing and rental data
Dear Paul,
This memo addresses the key issues highlighted by you related to the rapidly growing
housing price in Melbourne with median house prices in Melbourne suburbs reaching over $1
million. For addressing your concern regarding the impact of housing affordability in Melbourne,
a sample data of 120 houses in Kingfisherbay has been analyzed. The average house price in the
Kingfisherby is $886575. The sample housing price shows a relatively smaller variability in the
housing price. The highest and lowest house price in the recorded sample of Kingfisherbay are
$1761, 000 and $192,000 respectively. The average house price in Kingfisherbay likely to
remain within the range between $8287848.4 and $945311.6. Coming to your query related to
the use of median house price instead of average price I would like to inform you that median is
considered as a better measure than simple average in situation where the series include extreme
values. This is because simple average is large affected by extreme value while median is not.
Since housing prices experience rapid fluctuations and include very low and very high prices in
evaluating housing price trend median house price is taken into consideration instead of mean.
Related to the concern regarding whether there appears to be any significant difference in
house prices between suburbs in Kingfisherbay, the analysis revealed that average house prices
are significantly different between the three suburbs. This means buyers of houses face different
house prices depending on their choice of suburbs.

FOUNDATION SKILLS IN DATA ANALYSIS3
Condition of houses often play an important role in determining price of houses. The
condition of houses can be wither very poor or poor or good or excellent. I would like to inform
you most of the house in the Kingfisherbay are either in good condition or in poor condition.
There is though relatively small number of houses that are in excellent condition, the number
however is still larger than that houses in very poor state. The condition of houses do not differ
significantly between suburbs.
There are different factor that influence housing price in Kingfisherbay. The factors of
your concerns were Rooms, Land size in square meters, House area in square meter and Weekly
rent. All these factors have a positive relation with house price. This implies house price
increases with increase in number of rooms, land size in square meters, house area in square
meters and weekly rent. Regression analysis has been performed to evaluate the influence of
these factors on house price. Land size, House area and Weekly rent are the significant
determinants of house prices. Of these factor House area in square meter has the stronger
influence than others. Land size in square meter has the least influence on house price.
Subdividing is one way to increase availability of new land. Given the high price of new
land as a result of high demand, it is profitable to increase land availability by sub diving land.
Generally a land can be subdivided if its size is 1000 square meter or more. In the collected
sample data for Kingfisherbay, out of 120 house there are 56 houses having a land size of 1000
square meter or more. There are in effect 46.67 percentage of all houses in Kingfisherbay that are
suitable for subdivision. This percentage is likely to vary between 37.74 percent and 55.59
percentage in 95 percent cases. The estimated average land size across all of Kingfisherbay is
1175.225 square meter. The estimated range for average land size in Kingfisherbay is between
1107.82 square meter and 1242.63 square meter.