Domain Group Stratified Median House Price Model

The Domain Group uses a refined median price statistical model to estimate house and unit prices for capital cities. To modify the effects of an over-representation of high or low value sales in a given period, this model uses compositional adjustment that divides sales data into various price sectors. 

The median price for each of these price strata is calculated then all the various price strata medians are combined to estimate an overall median house price for the capital city.

In addition to moderating the impact of compositional bias in median house price measurements, the Domain Group methodology also acts to neutralise the seasonal impacts of house price data.

The Domain Group model features the same stratified methodology used by the Australian Bureau of Statistics for its established house price index, although with some refinements.

Details of the background to the Domain Group methodology are described in the Reserve Bank of Australia paper Measuring Housing Price Growth – Using Stratification to Improve Median-based Measures.

Details of the ABS stratified methodology can be found at House Price Indexes: Concepts, Sources and Methods, Australia, 2009

For further details contact Dr Andrew Wilson senior economist for the Domain Group