MIS770 Foundation Skills In Data Analysis

MIS770 Foundation Skills In Data Analysis

Note: All data, reports, people and scenarios in this assignments are either fictitious or have been modified from their original state.  MIS770 Foundation Skills In Data Analysis:

You play the role of Emma Thomson, a data analyst in the Research and Analysis Group at the Real Estate Institute of Victoria (REIV). You are often required to report outcomes of your analysis to senior managers at the Institute who have little or no knowledge of data analysis.

Of specific interest to the REIV is the increasing house prices in Melbourne and potentially what this will mean for buyers yet to enter the market.

 

A recent analysis, which received publicity in the media, showed that there were more Melbourne suburbs with a median house price of over $1 million, with this trend only set to continue as evidenced from recent auction and private sales figures (refer to the documents million dollar suburbs.pdf and buyers smash records.

pdf – sourced from the Melbourne’s Herald Sun). Just recently you have been working on a pilot survey from the City of Kingfisherbay concerning house prices, rental costs and returns, as well as other related data.

In light of the above, the REIV is very interested to see where the City of Kingfisherbay, and more specifically its suburbs are at when it comes to house prices and affordability.

Paul Anderson, Director of the Housing Affordability Division at the Real Estate Institute has written to you regarding the Kingfisherbay housing survey.His memo to you is reproduced below:

Foundation Skills In Data Analysis

Questions:

An overall summary of the house prices in Kingfisherbay? In addition, the media articles focus on median house prices and not the mean. I have never been able to understand why this is so; surely the “average” is the “average”. Can you clarify that for me?

2. Does there appear to be any difference in the house prices between the suburbs in Kingfisherbay?

3.  Can you supply me with a brief summary on the condition of houses in Kingfisherbay? In addition, can you further analyse to see whether there appears to be any differences among the suburbs in terms of condition?

4. Is house price related to any of the variables, namely: Rooms, Land Size, House Area and Weekly rent that you have collected in the sample? A short description of the relationship would be fine. Is there any one which stands out as having a stronger influence on house prices? Which of these variables has the least influence on house prices?

I realise that the survey relates to a random sample of 120 houses sold in the (fictitious) Melbourne City of Kingfisherbay, and that this information can be used to draw inferences about all houses in the City of Kingfisherbay. With that in mind, I hope you are able to provide me with answers to the following questions:

5. The newspaper article “Buyers smash records” mentions how new land is in high demand and the ridiculous situation of buyers having to camp out for days to purchase land. I’m interested in whether there is the opportunity to make more land available in areas such as Kingfisherbay by subdividing. Generally if a land size is at least 1000m2 or more then it can be subdivided. Can you work out what percentage of all houses in Kingfisherbay are suitable for subdivision? Also, what is the estimated average land size across all of Kingfisherbay?

6. As well as housing affordability, the REIV is also concerned about the lack of rental properties available right across Melbourne including areas such as Kingfisherbay. At a recent meeting it was claimed by a senior manager that the proportion of rental properties that were vacant had dropped below 25%. Furthermore, it was recently reported that the average selling price for bay side houses, that is, for all cities and suburbs located around the Bay in Melbourne, had now exceeded $825,000. Can you check whether these two claims are correct for all of Kingfisherbay?

7. For next year’s study, we would like to be able estimate the true proportion of houses of land size 1000m2 or more to within 2% and the average house price to within $20,000 with a high level of confidence How many houses would be needed to be included in next year’s survey to achieve these two requirements?

Finally, assuming we take a big enough sample from Kingfisherbay next year, would it be possible to generalise the results to all of Melbourne? This will save us a lot of work duplicating the study in other suburbs.