Data Zone’s Housing Market Analysis for Whitehorse

Memorandum: Data Zone’s Housing Market Analysis
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Memorandum
Date: 20th January 2017
To: Zoe Zhou, Chief Data Analyst
From: Sandy Stedwell, Research and Analysis Department
Subject: Analysis of Whitehorse Market Data
Dear Zoe,
As instructed, the following memo will be able to open up on some of the issues at hand. The
results, will therefore play a key part in decision making now and in future market analysis. An
analysis was carried out of the recent real estate market data for Whitehorse as requested. Before
the presentation of the results obtained, it will be of great importance to provide a description of
the database used. The data on Whitehorse data provided contained twenty-four fields. The
fields are HouseNo, Rooms, House Price, Age, HouseAreaSqm, LandSizeSqm, Material, Street,
Storeys, ToTrainKm, ToBusKm, ToShopsKm, Bedrooms, Bathrooms, Style, Kitchen,
MountainViews, Heating, WeeklyRent, AirCon, RentalReturn percent, Suburb, Condition, and
Rental Status. The sample size of the data used was 120, that is, 120 houses in Whitehorse were
used in the market data. The houses in Whitehorse were priced in Australian dollars with
different characteristics such as the number of rooms which can be considered as main in the
house, the area of a block of land in squared meters, the area of the house in squared meters and
the age of the house in years. The houses were made of building materials which ranged from
timber to veneer to brick. The houses also had varying distances from either the train station, the
bus stop, or the shopping center. These distances were measured in terms of kilometers. The
houses had a varying number of stores or levels in the house with varying number of bedrooms
and a varying number of bathrooms. A sense of style could also be observed among the houses
with some of them being traditional while the others were non-traditional. The style was also a
component of the kitchens as some of them had the older style while the others were modern.
Depending on the house, some of the houses had installed a central or other heating system while
others had not. This also applied to the presence of an installed air conditioning in the houses.
The real agency also had evaluated the street appeal at the proximity of the house giving a rating
of 0 for the lowest appeal up to a rating of 10 to the highest appeal. The view of Mt Dandenong
was also a factor with evaluation rating the proportion of views of the mountain. A full view was
rated at 1 while a nil view was rated at 0. Depending on the proportion, in between values were
also given. The houses were also evaluated with regards to the suburbs they were in. these
suburbs in Whitehorse were Box Hill, Mont Albert, and Surry Hills suburbs. The weekly rent in
dollars, whether the actual or estimated was estimated. In this respect, the annual rate of return
forms the rental income as a percentage was also obtained. The condition of the houses, in
general, was also determined with the option being in a very poor, poor, good or in excellent
condition. The rental status of the house was also obtained with houses being either vacant
(available for rent), rented (currently rented) or owned (occupied by owner). These data were
then placed into their respective field and the obtained database was used for analysis.
Q1. An Overall View of House Prices

It is evident that the data was collected from 120 houses in Whitehorse. On average, house prices
in Whitehorse is $889.55. The spread of house prices was $326.15 on each side of the average.
The highest house price in Whitehorse was $1,731 while the lowest was $224. All in all, we can
say with a 95 percent confidence that the mean house price in Whitehorse falls between $831.20
and $947.90.
Q2. House Prices vs Condition
The houses in Whitehorse were categorized into four in accordance with their conditions. The
conditions are very poor, poor, good and excellent. From these, it is seen that the majority of the
houses in Whitehorse are in good conditions. This is represented by 35 percent of the houses in
Whitehorse sample data collected. Consequently, houses in poor conditions came in second with
a representation of 33 percent of houses in the Whitehorse data collected. A small number of
houses were deemed to be in excellent conditions or being in very poor conditions. This is seen
by the house representation of 19 percent of houses which are in excellent conditions while 13
percent of the houses are deemed to be in very poor conditions.
The houses were indeed priced differently based on their conditions. The houses in excellent
conditions were highly priced. On average, they had the highest average price of $1,137. The
houses in good conditions were priced lower than the houses in the excellent conditions. On
average, the houses in good conditions were priced at $871.14. Indeed, with a deterioration in the
conditions of the house, it was seen that the house prices did decreases. Houses which are in poor
conditions were priced lower than the house in good conditions. Thus, they had an average mean
price of $813.35. The houses in very poor condition were the lowest priced among the four
conditions of categorizing the houses. Hence, the houses in very poor conditions had the lowest
average price of $764.27.
The area of Whitehorse was categorized into three suburbs. The suburbs were Box Hill, Mont
Albert, and Surry Hills. The houses in the three suburbs were then categorized based on their
conditions. That is, whether they were in very poor, in poor, in good or in excellent conditions.
With this in mind, it was established whether the three suburbs had different conditions for their
houses. It was established that with regards to conditions, there was no evidence that proves
there was a significant difference in the condition of houses among the three suburbs. However,
based on graphical displays, it was seen that in Box Hill suburb, most of the houses are in good
conditions. Similar observations can be made for Surry Hills suburb where most of the houses
are in good conditions. However, in Mont Albert suburb the majority of the houses are in poor
conditions.
Q3. House Affordability
There is a numerous number of newspaper articles which are focusing on house affordability in
Melbourne (Abelson & Chung, 2005). With this regards, in the whole of Whitehorse the
proportion of houses which are worth $1 million or more was obtained. It was estimated that in
Whitehorse 35 percent of the houses are worth indeed $1 million or more.
On the other hand, the proportion of houses in Whitehorse wholly which are valued at less than
$600,000 was also obtained. The results were that it was estimated that 21 percent of houses
across Whitehorse were valued at $600,000.