Posted to Melbourne Leader (25/1/2010) on 31/1/2010 at 9:48am
Commenting on “Property flat out”
Raw statistics data don't tell lies, but the manipulators of statistics are the culprits. For example, a property situated in MyStreet, MySuburb worth $500,000 was sold, demolished and a new building built on the original site at a construction cost say $500,000, plus other costs of $200,000 (furnishing) would bring total cost of the new property to $1.2 million
If the new property was sold for $1.5 million, the property price database would record the property at MyStreet at MySuburb was sold for $500,000 and now $1.5 million. Without the facts and figures, one will jump to a conclusion that the latest sale price is 3 times the previous, but in fact the seller made only $300,000 out of $1.2 million investment.
What if the sale price was $1.2 million? Not only the seller did not breakeven, but also made a loss on selling commission, and loss opportunity of say putting money on something that gives a better return.
