Data Terms – Median Price, Capital Appreciation & Rental Yield

[2] Why do we use median price and not average price?

Median price is used in the analysis as it reflects a more accurate view of the market since it is typically less affected by large variations in the data. For example, let’s assume that the project that you are looking at includes 5 properties, as listed below with transacted prices.

Property#1 – RM350, 000
Property#2 – RM370, 000
Property#3 – RM 310,000
Property#4 – RM1, 200,000
Property#5 – RM335,000

To determine the median price, we sort the list in ascending order, then pick the middle price which is RM350,000.

Prices in ascending order
Property#3 – RM 310,000
Property#5 – RM 335,000
Property#1 – RM350,000
Property#2 – RM370,000
Property#4 – RM1, 200, 000

Property #4 is priced much higher than the rest. This will have a significant effect on the average price, which happens to be $513,000. (sum all prices and divide by total transactions). Hence, the median price is a much more realistic interpretation compared to average price.

[3] The capital growth value shown is the average capital appreciation of all transactions within the project/scheme throughout the review period.

[4] Rental Yield = (Monthly median rental X 12)/Median property price X 100, where:  

  • MEDIAN PROPERTY PRICE: Sales data captured from the Valuation and Property Services Department (JPPH) and compiled by iProperty.com’s big data solution, iPropertyiQ.com.
  • MONTHLY MEDIAN RENTAL: The annualised figure of asking median rent for each condominium obtained from iProperty.com Malaysia’s property listing database. Only monthly rents within the evaluation period are used to determine the median for each project.
  • REVIEW PERIOD: September 2016 to August 2017.

 

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