Total Value of Dwellings: Concepts, Sources and Methods

Latest release

Describes the data sources and methods used to compile the estimates of the value of Australia's dwelling stock and related statistics

Reference period
2022
Released
14/06/2022
Next release Unknown
First release

Preface

Aim of this publication

This publication documents the concepts, sources and methods used by the Australian Bureau of Statistics (ABS) in compiling estimates of the total value of Australia's dwelling stock. This publication also provides insight into the practical challenges that the ABS encounters in compiling these data, and how it deals with these challenges.

In addition, this publication contains an explanation of additional outputs compiled from the same data source as the estimates of the value of the dwelling stock.

Release of data

The estimates of the Total Value of the Dwelling Stock are compiled quarterly by the ABS for the quarters ending in March, June, September and December each year. The data are released in Total Value of Dwellings, approximately twelve weeks after the end of the reference quarter. This timing aligns with the release of the Australian National Accounts: Finance and Wealth publication.

ABS contacts

The ABS will periodically update this publication. We invite comments about its usefulness as a guide to our data about the residential property market.

Comments and requests for further information about the topics covered in this publication should be directed to:

Prices Branch
Australian Bureau of Statistics
GPO Box 796
Sydney NSW 2001

Email: house.prices@abs.gov.au

Introduction

Total value of the dwelling stock

The Total Value of the Dwelling Stock (TVDS) is an estimate of the value of all residential dwellings in Australia. The ABS publishes TVDS at the State, Territory and national level. The TVDS is compiled by using the number of dwellings in the stock, and the average price of those dwellings.   

Use and purpose of the estimates

The value of Australia's stock of dwellings is of significant interest to policy makers, market analysts and researchers for a range of economic and social reasons. The most significant component of the non-financial assets owned by households is the value of dwellings.

The Total Value of Dwelling Stock estimates support the compilation of the non-financial assets component of the Household Balance Sheet in the Australian System of National Accounts (ASNA). The ABS produces household balance sheets on a quarterly basis. These quarterly estimates allow the analysis of short-term changes in household wealth.

In addition to these estimates, the Total Value of Dwellings publication also contains statistics relating to transfer counts and median prices of established houses and attached dwellings.

Further details are provided in subsequent sections.

Historical background

Introduction

This section provides a history of the development of the Total Value of Dwellings estimates in Australia.

The TVDS developed from the ABS's work in producing residential property price indexes. The history of those indexes is described in Residential Property Price Indexes: Concepts, Sources and Methods, 2018. The ABS’s residential property price indexes ceased in the December quarter 2021.

Inception of the series

A periodic review of the ABS's House Price Index in 2012 resulted in the decision to produce two new additional indexes:

  • the Attached Dwelling Price Index, an index covering flats, units and apartments plus semi-detached, row and terrace houses; and
  • the Residential Property Price Index, an aggregation of the House Price Index and the Attached Dwellings Price Index.

The price of residential dwellings is also an important input used to compile wealth statistics.

Values of dwellings and land are published as part of the national and sectoral balance sheets within the annual Australian System of National Accounts (ASNA) publication. Until the September quarter 2013, the ABS produced household balance sheets on an annual basis only. Consequently, analysis of short-term changes in household wealth was constrained. The estimates of the value of dwellings and land were based on figures compiled by the Reserve Bank of Australia (RBA).

A barrier to the production of timely, quarterly balance sheets had been the lack of high quality quarterly estimates of non-financial assets owned by households. The financial assets are available quarterly in the Financial Accounts produced by the ABS.  The total value of the dwelling stock is the most significant component of non-financial assets owned by households.

The price of residential dwellings is a key input to valuing the dwelling stock. As part of the 2012 review, the ABS developed a method to produce a quarterly estimate of the total value of the dwelling stock using the dataset used to produce the Residential Property Price Indexes. The ABS Total Value of the Dwelling Stock series replaced the RBA measure, and has been used in the compilation of the Annual National Accounts from 2012-13 and the quarterly accounts from the September quarter 2013. 

In addition, unstratified median prices and transfer counts could be produced for both dwelling types.

These changes were introduced in the December quarter 2013 issue of Residential Property Price Indexes: Eight Capital Cities.

2014 review

In 2014, the Residential property prices work program was reviewed in response to planned reductions to the ABS work program. The outcomes of this review were implemented in the March quarter 2015 issue of Residential Property Price Indexes: Eight Capital Cities.

In summary, the review resulted in:

  • a change in data source used to compile the residential property price indexes and related statistics. From the March quarter 2014, the ABS has used data supplied by CoreLogic to compile these statistics. This replaced direct collection of data by the ABS. See the section Data source and pricing concepts for further details.
  • a change to the method used to calculate prices for compiling the total value of dwelling stock.
  • more timely availability of the unstratified median prices and numbers of dwelling transfers.

2018 review

The most recent review of the TVDS was conducted in 2018, with updates introduced from the December quarter 2018. Outcomes of this review included:

  • updates to inputs used to compile the TVDS, using data from the 2016 Census; and
  • implementation of changes to the residential property sales dataset supplied by CoreLogic.

Updates to the TVDS were incorporated into the series over a number of quarters. A two year window was used to smooth in the change for the Household series, while a four year window was used for the Non-Household series. (See 'Calculating the total value of the dwelling stock', Dwelling ownership, for further information.) This approach is in line with standard ABS practice for introducing changes, and does not affect interpretation of the data.

The implementation of the updated residential property sales dataset supplied by CoreLogic from the December quarter 2018 resulted in revisions to the median price and transfers series. This series was revised back to March quarter 2014, when CoreLogic data became the source for this series.

Details of the concepts, sources and methods underlying the compilation of the TVDS and median price and transfers series are described in the following sections.

2022 methodological change

The ABS ceased producing residential property price indexes in the December quarter 2021. Accordingly, we developed a new method for producing the first preliminary estimate of the total value of the dwelling stock by using the CoreLogic Hedonic Home Value Index. This method is described in 'Calculating the total value of the dwelling stock' below.

Details of the concepts, sources and methods underlying the TVDS and median price and transfers series are described in the following sections.  

Data source and pricing concepts

Introduction

The price of dwellings is a key input to valuing the dwelling stock. This section describes data collection processes for the price component of the TVDS. It also contains information about the source of the data and related measurement issues.

Data source

A dataset of all Australian residential property sales data is supplied to the ABS by CoreLogic. See Appendix: CoreLogic Disclaimer and copyright notices, in Total Value of Dwellings. This dataset, referred to below as the CoreLogic dataset, is a combination of residential property sales data obtained from State and Territory Land Titles Office or Valuers General Offices in each capital city, and real estate agents’ data provided to CoreLogic. The ABS applies classifications to the CoreLogic dataset to create the residential property sales dataset from which the statistics presented in Total Value of Dwellings are produced. Aspects of the CoreLogic dataset are described in the paragraphs below.

Data availability and timing

The residential property sales dataset is obtained from CoreLogic one month and nine days after the end of the quarter. This timing allows for the greatest number of Valuer General records to be supplied and is also consistent with the need to compile timely statistics.

Pricing point

In the Australian context, there are four significant dates in the purchase of a residential property. A general timeline of the stages of the sale of residential property is as follows:

  • verbal agreement to purchase at a negotiated price;
  • approval of mortgage financing;
  • exchange of contracts; and
  • settlement of the property sale.

For the purposes of measuring price change of residential property, it is desirable to select the earliest date at which the final purchase price is set. The point in time at which the price is first determined is when verbal agreement is reached. However, there is no effective way to capture this information and it is possible for the originally agreed sale price to be renegotiated before the exchange of contracts. Property price statistics constructed on a settlement date basis incorporate a lag in identifying the turning points in housing prices, as the settlement date can occur several weeks or months after contracts are exchanged. Hence, in compiling these statistics, the date of exchange of contracts is the preferred date. Accordingly, the ABS attributes sales to the relevant quarter depending on the date of exchange of contracts.

For most States and Territories, the CoreLogic dataset includes the date of exchange of contracts. However, the contract exchange date is not captured in either South Australia or the Northern Territory. For these jurisdictions, the ABS imputes the contract exchange date from the settlement date. The imputed settlement dates are modelled on the relationship between the settlement and exchange dates of price segments in Queensland, where similar administrative arrangements exist. The assumptions underpinning these models are reviewed from time to time to ensure their continuing effectiveness and relevance.

Non-market transactions

A typical CoreLogic dataset will contain records of transactions which are not representative of the market. These could be categorised as transactions between related parties, such as family members or in divorce settlements.

Where these transactions can be identified, they are removed from the dataset by the ABS and therefore do not contribute to calculations.

Scope and coverage

Introduction

This section outlines the scope and coverage of these statistics, with reference to the classifications that are used to define them.

Scope

The scope of these statistics is restricted to those dwellings where the primary purpose is residential (that is, excluding commercial properties), regardless of ownership and tenure of the occupants (that is, including government owned properties and properties owned by private landlords). Residential dwellings are classified as either established houses or attached dwellings.

An established house is defined as a free standing, detached residential dwelling on its own block of land regardless of age, that is, including new houses sold as a house and land package as well as second-hand houses. Price changes, therefore, relate to changes in the total price of houses and land.

Established houses comprise:

  • ordinary detached houses;
  • houses with offices;
  • houses with flats; and
  • rural residential houses (which are not part of a farming business).

An attached dwelling is defined as a dwelling which shares a structural component with one or more other dwellings. This may include walls, ceiling, floor or roofing.

Attached dwellings comprise:

  • semi-detached, row and terrace houses;
  • townhouses; and
  • flats, units and apartments.

Dwelling type

The definition of dwelling structure type used in the median price and transfer count statistics is consistent with the relevant ABS classifications:

Geographic coverage, Total Value of Dwelling Stock

The Total Value of Dwelling Stock estimates are presented at the State and Territory and Australian level.

Geographic coverage, median prices and transfer counts

The median price and transfer data are presented for capital city regions and for the rest of each State and Territory. Capital cities are defined as Greater Capital City Statistical Areas (GCCSAs).

The GCCSAs capture the socio-economic extent of the State/Territory capital cities for statistical purposes. For more detail please see Australian Statistical Geography Standard (ASGS):Volume 1 - Main Structure and Greater Capital City Statistical Areas, July 2016.  From the December quarter 2013, all references to capital cities are defined by the ASGS GCCSA. For earlier periods, capital city regions are defined in terms of Statistical Divisions under the Australian Statistical Geography Classification (ASGC). Historical naming conventions (for example, Sydney rather than Greater Sydney) have been maintained in the publication. A time series is available but users should exercise caution in interpreting median prices and numbers of house transfers over time, as historical data will reflect capital city boundaries as previously defined. This is particularly significant for Canberra where, in the published data, the capital city is defined to be the whole of the ACT as from the December quarter 2013.

Coverage is limited to those suburbs which existed within the GCCSA boundaries at the time of the 2016 Census of Population and Housing.

Where table headings indicate that the estimates relate to the Rest of State or the State or Territory, the ASGS classification is used to determine boundaries.

Issues affecting coverage

Due to the classification of structures used in the source data, for New South Wales, Queensland, Tasmania and the Northern Territory it is currently not practical to separately identify some dwelling types (townhouses and terraces) as attached dwellings and they are instead classified as established houses. This affects the estimates of median prices and transfer counts for the Capital City and Rest of State regions in these States and Territories.

Calculating the Total Value of the Dwelling Stock

Introduction

Values of dwellings and land are published annually as part of the national and sectoral balance sheets within the annual Australian System of National Accounts (ASNA) publication. Since the September quarter 2013, a household balance sheet is also published quarterly by the ABS.

Data for the dwellings and land components of these balance sheets are sourced, in part, from the Total Value of the Dwelling Stock series in Total Value of Dwellings. This section outlines how these series are compiled.

Method for valuing the dwelling stock

Valuing the dwelling stock requires information about three things: the price of the dwellings, the number of dwellings in the stock, and the sector of the economy in which the dwellings are owned.

Scope

The scope of the value of the dwelling stock is restricted to dwellings where the primary purpose is residential (that is, excluding commercial properties), regardless of ownership or tenure of the occupants (that is, including government-owned properties and properties owned by private landlords).

Dwelling price

The price of dwellings is calculated from the residential property sales dataset provided to the ABS by CoreLogic, excluding real estate agents’ data.

One of the challenges in estimating the value of the dwelling stock is determining a representative price for all dwellings in the stock when price information is available for only those dwellings sold in the reference period. To overcome this, price information from dwellings sold is used to infer the price of all the dwellings not sold during the period.

This is achieved by stratifying the stock, based on the assumption that the major price-determining attributes of a dwelling are location and its characteristics (represented by dwelling type). Location is represented by Statistical Area Level 2 (SA2), as defined in Australian Statistical Geography Standard (ASGS): Volume 1 - Main Structure and Greater Capital City Statistical Areas, July 2016. The SA2 level of geography has been chosen due to its alignment with gazetted localities, size, comparability with other data, and stability between Censuses.

This method ensures that sales in any region are used to infer the value of only those other dwellings that are in the same region and of the same type. By stratifying in this way, the ABS is able to calculate a quarterly mean dwelling price by geographic area and by dwelling type for all strata and, by consequence, the entire dwelling stock.

In the most recent period the mean price is not considered reliable, due to data availability constraints, so the CoreLogic Hedonic Home Value Index is used to calculate a proxy for the average price. Further details are provided in subsequent sections. 

The number of dwellings

The Census of Population and Housing, conducted every five years by the ABS, provides the number (and type) of dwellings in the stock at a detailed geographic level. Between Censuses, however, high quality information about the dwelling stock is available only in relation to additions to the stock. Information about deductions from the stock is not readily available. To calculate a current period estimate of the number of dwellings, the net additions to the stock are estimated from:

The net additions estimate is then applied to the Census count data.

Historical gross additions to the stock and changes to the dwelling stock between Censuses are used to calculate a realisation rate. For example, if for every 100 dwellings completed or added to the dwelling stock there are 20 demolitions, then there is a net addition of 80 dwellings to the stock. This represents a realisation rate of 0.80.

To calculate net additions to the stock in an ongoing way, a realisation rate is calculated at the State/Territory level for each of the last four Censuses and averaged. The choice to calculate this rate separately for each State/Territory reflects their different supply and demand factors affecting construction of new dwellings.

Once the realisation rate has been calculated, the estimated number of dwellings in the stock each quarter is simply:

Census count of dwellings 
plus (Completions times Realisation Rate), that is, net additions to the stock.

The total stock figure for each state is then apportioned to each SA2 (based on the number of dwellings of each type at the last Census) so that there is a quarterly estimate of the number of dwellings in the stock (by dwelling type).

Dwelling ownership

The primary purpose of the suite of TVDS estimates is to support the compilation of the non-financial assets component of the Household Balance Sheet in the Australian System of National Accounts (ASNA).

To enable this, the TVDS estimates are compiled for two sectors of ownership: the Household sector (which includes Non-Profit Institutions Serving Households) and the Non-Household sector (all other sectors of ownership). The sectors of ownership are consistent with the Standard Economic Sector Classification of Australia (SESCA), 2008 (Version 1.1).

The sector of ownership of dwellings cannot be observed directly in the population, nor is it easily obtainable for every transfer that occurs. To overcome this, information about landlord and tenure type (see Census Dictionary, 2016) from the 2016 Census of Population and Housing is used as a proxy for ownership.

The following tenure types are allocated to the Household sector:

  • owned outright;
  • owned with a mortgage; and
  • being purchased under a rent/buy scheme.

Where the tenure type is 'rented' or 'being occupied rent free', the following landlord types are allocated to the Household sector (with the remainder being allocated to the Non-Household sector):

  • real estate agent;
  • person not in the same household; and
  • housing co-operative/community/church group.

‘Other’ tenure type, being occupied under a life tenure scheme, not-stated and not-applicable tenure types are excluded from calculations.

The proportion of properties owned by sector by Capital City/Rest of State by dwelling type from the 2016 Census is used to apportion the total value into sectors each quarter. For example, if in the Rest of NSW 83% of attached dwellings were owned by households, then 83% of the total value of all attached dwellings in the Rest of NSW would be allocated to the Household sector.

Table 1 shows the percentage of dwellings, by type, owned by the Household sector.

Table 1. Ownership by Dwelling type, Australia, 2016
% of dwellings owned by the household sector 
Detached Houses96.6
Attached Dwellings(a)90.7
All Dwellings95.0

(a) Includes flats/units/apartments and semi-detached/row/terrace houses.

Producing the total value of dwelling stock

A value of the dwelling stock can now be calculated, as a price, dwelling count and ownership proportions have been determined.

Each quarter, the mean price for each geographic area (SA2) is multiplied by an estimated number of dwellings (by dwelling type, for the SA2) to compile a total value of the dwelling stock. As the SA2s aggregate up into larger geographies, this allows for the compilation of dwelling stock values at the State and national level.

However, the calculation of mean prices in the most recent quarter using the CoreLogic dataset is likely to lead to volatile results. This is because of the time lag between the property price being determined and information being received and processed by the Valuers General and provided by CoreLogic to the ABS.

To enable the timely publication of data of the value of the dwelling stock, the movement of the CoreLogic Hedonic Home Value index, for all dwellings, at the State or Territory level is used as a proxy for price change at the State and Territory level for the most recent quarter. This method results in estimates that are preliminary for this period.

The movement of the CoreLogic index is measured between the beginning of month 2 in the latest quarter and the end of month 1 in the following quarter. Measuring the change in the CoreLogic index over this period seeks to account for the lags in transmission of property sales data, and so represent price change for transactions which occurred within the latest quarter. For example, the price index movements used in calculating the preliminary estimate for the March quarter 2022 relate to the period consisting of February, March and April 2022.

Table 2 shows an example of the calculation of the Total Value of the Dwelling Stock.

TABLE 2. Example of Calculations (a)
State/StrataCensus Count ('000)Dwelling Share (%)Net Additions ('000)Estimated Dwellings ('000)Mean Price ($)Combined Value ($ m)
 quantityquantity / quantity (State)share * additions (State)quantity + net additionspricequantity * price
NSW3 044.5100.015.33,059.8(b)(c) 2,627,484.9
Stratum 12.10.073.05.11,111,0005,666.1
Stratum 23.10.102.45.5390,0002,145.0
Stratum 32.30.082.34.6972,0004,471.2
.....................
VIC2,521.0100.016.82,537.8(b)(c) 1,711,000.8
.....................
AUSTRALIA9,829.1100.056.19,885.2(b)(d) 6,441,224.4

(a) Each stratum is a combination of SA2 x dwelling type. Data is illustrative only.
(b) Can be calculated by taking the total value and dividing it by number of dwellings.
(c) Sum of all strata combined values.
(d) Sum of all state values.

Revisions

Revisions to the total value of dwelling stock are applied to both the second and third most recent quarters, due to updated building completions and residential property sales data becoming available to use in the direct calculation of quantity and price. The TVDS for the third most recent quarter is considered Final.

Other measurement issues

Adjusting for the Other Territories

The Other Territories (comprising Jervis Bay Territory, Norfolk Island, Christmas Island and the Cocos (Keeling) Islands) are considered part of economic and geographic Australia; however, the ABS does not receive Valuer General data for these Territories.

In order to include the value of the Other Territories' dwelling stock in the TVDS estimates, an adjustment is made to NSW (for Jervis Bay and Norfolk Island) and WA (for Christmas Island and the Cocos (Keeling) Islands) total values. This adjustment is based on the number of dwellings in each of the Other Territories, relative to the number of dwellings in the state, from the latest Census.

Data for the Other Territories is not included in the estimated number of dwellings in the stock, as it cannot be separately calculated.

Vacant land

The value of vacant residential land is not included in the total value of the dwelling stock, as the ABS cannot currently estimate the price or quantity component of vacant residential land.

The ABS will continue to investigate potential data sources that could be used to calculate the total value of vacant residential land in the future.

Outputs

The following information is published in Table 1 of Total Value of Dwellings:

  • Value of the dwelling stock owned by households, States and Territories ($ m);
  • Value of the dwelling stock owned by non-households, States and Territories ($ m);
  • Value of the dwelling stock owned by All Sectors, States and Territories ($ m);
  • Number of residential dwellings, States and Territories ('000); and
  • Mean price of residential dwellings, States and Territories ($'000).

Further breakdowns of the data are not available.

Median property prices and transfer counts

Introduction

In addition to the total value of dwelling stock and its components, the ABS publishes in Table 2 of Total Value of Dwellings, for each capital city and the Rest of State:

  • the median price of all established house and attached dwelling transfers; and
  • the number of such transfers.

The number of transfers of established houses and attached dwellings provides an indication of the level of sales activity for each quarter.

Methodology

The median prices are calculated with no stratification or weighting applied. Movements in the median prices should not be interpreted as, or compared to, movements in price indexes.

Revisions

As the ABS receives additional residential property sales data for previous quarters, the median prices and the number of house and attached dwelling transfers are revised as necessary. Revisions can be made to the most recent ten quarters of published figures.

These revisions can be substantial, especially in the quarter immediately following first release, and accordingly the median price and transfer data initially published for each quarter should be interpreted with caution. For this reason, the current quarter median price and number of transfers are annotated as being preliminary and that the series is subject to revision.

Data release

Introduction

This section describes the residential property data released by the ABS, and provides some guidance about interpretation.

Publication of statistics

Total Value of Dwellings is compiled and published quarterly, approximately twelve weeks after the end of the reference quarter. Each quarterly release announces publication dates for the next four quarterly issues.

Available free of charge on the ABS website www.abs.gov.au are:

  • the main findings, in HTML format; and
  • time series spreadsheets, downloadable in Microsoft Excel format.

The data are also available through the Data Explorer product on the ABS website. Data Explorer is an interactive free tool that presents data in a searchable, flexible and dynamic way.

In addition to the estimates of the Total Value of the Dwelling Stock, the ABS publishes, for each capital city and the Rest of State:

  • Median prices of all established house and attached dwelling transfers, and
  • The number of established house and attached dwelling transfers.

Comparison over time

From the March quarter 2015, the source of unit record residential property sales data changed. The complete CoreLogic unit record file, including real estate agents' data, has been used to calculate the median price and transfers series from the March quarter 2014 up to the current quarter. There are differences in the numbers produced using the new data source compared to the previous data source (which contained Valuer General data only). Therefore, users should apply caution when comparing data prior to March quarter 2014 with data for the March quarter 2014 and later periods.

From the December quarter 2018 issue of Residential Property Price Indexes: Eight Capital Cities, the residential property sales dataset supplied by CoreLogic incorporated a number of improvements. CoreLogic provided the ABS with an updated dataset back to the March quarter 2014. This resulted in historical revisions to the median and transfers series extending back to the March quarter 2014. Users should continue to apply caution when comparing data prior to March quarter 2014 with data for the March quarter 2014 and later periods.

Please see also the discussion, in earlier sections, of how revisions can apply to the Total Value of Dwelling Stock and to the median price and transfer series.

Comparing medians and means

Users should exercise caution when comparing the median prices and the mean price of dwellings. The unstratified median price (for established houses and attached dwellings) of dwelling transfers over the reference period is the price at the mid-point of all properties sold in the period. This means that half of all properties (in the same region and of the same dwelling type) that were sold in the period did so at a price below the median, and the other half had a price above the median.

In contrast, the mean price of residential dwellings represents the average dwelling price in the reference period regardless of dwelling type. The mean is derived by taking the total value of residential dwellings and dividing by the estimated number of dwellings in the stock. Additionally, the mean prices are calculated across the whole of state and for all dwelling types, whereas the medians are calculated for individual dwelling types and for the capital city and rest of state separately.

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