Is RPData’s Rent Vs Buy report reliable?
Today I was honoured to see that my visualisation of RPData’s Rent Vs Buy report has been featured in Tableau’s Viz of the Day Gallery.
While I’m quite proud of my work on this visualisation, I honestly can’t tell if the numbers under the hood are an accurate depiction of what they proclaim to be.
The report claims to show whether it is cheaper to buy or rent in any given Australian suburb, but it stops at comparing rental figures with various mortgage repayments on the median prices for buying a house.
Given the slim differences in the suburbs where RPData reports that it’s cheaper to buy, one would think that Stamp Duty alone should be enough to throw the figures in favour of renting. Once you add the steeper maintenance costs and local government rates that owners have to pay, it’s hard to imagine buying ever being cheaper.
In the short-term anyway.
RPData doesn’t include the opportunity cost of the equity gained from owning a house, which would be hugely useful in illustrating why people would buy a house outside of cultural influences. That being said, is this relevant to what the report is aiming to show?
So to make the visualisation more useful, we’d need to include:
- Stamp Duty
- Fees and charges for buying and renting
- Equity
- Rates
- Maintenance costs
Already we can see that this is a fairly complicated data-set waiting to happen. Fortunately, all except for the last of those are figures that I can get my hands on, at least for Queensland.
New South Wales is notoriously stingy when it comes to open data. Go try and get the Shapefiles for their LGAs for free. I’ll wait right here.
Am I missing something with my appraisal of the RPData Rent Vs Buy report? I’d love to see a reply from RPData themselves, though I wonder if this report fails the first test of trusting statistics: who paid for them?
Head over to Tableau to see the RPData Rent Vs Buy visualisation.
Kieran Salsone is a producer and columnist for APN Regional Media. Check out his weekly business satire column, How do I business?
Why not email Tim Lawless (RP Data head of research) directly and ask?
Honestly, I want to look into this more so that if I do ask, I’m not asking from a point of complete ignorance.
If I don’t feel I’ve got my head around their decision by tomorrow, I’ll email them. Good suggestion.