What is the value of housing in your local economy?

We are very excited to introduce new data on housing valuation and rental listings to our economic profiles (economy.id), via our new partnership with Hometrack Pty. Ltd.

Housing value is an important indicator of economic prosperity, and can give insight into issues faced in economic development, such as accommodating key workers, and the demand for residential construction. Many regional areas also use lower housing values as a marketing tool to attract workers and businesses to the area.

Housing is an important part of the economic story of any area. Not a day goes by without a house-price related story in the newspapers. Is your area affordable for first home buyers? Or is it an area where people rent to be close to employment? And how much are they paying to do so?

Housing value data

Hometrack are a home valuation company who value dwellings using an Automated Valuation Database. This includes data from a variety of sources including Valuer-General, rental listings, geospatial datasets and surveys, to provide a method for estimating the value of any dwelling in Australia. This is used by financial institutions to value properties when assessing loan applications.

There are two components to the data – housing values and housing rents. For each, we show the median (which is usually quoted), and the first and third quartile housing costs. This is to give an indication of the spread of housing values in the area, and the likely value of an entry level property (first quartile) an upgrader property (third quartile) as well as an average (median) one.

These datasets are current at June each year and will be updated annually. The latest figures are from June 2014 and currently go back 4 years.

Telling the story of housing value

The City of Monash is a predominantly well off area in the eastern suburbs of Melbourne. The entry level first quartile housing price is $677,000, almost double the state average. The Monash median of $770,000 has risen by over $100k over the past two years. But by the time you get to the third quartile (“upgrader” price point) it is only a little higher than the metropolitan average, particularly for units.

And as it’s a large student area, with a significant lower-socio-economic pocket of renters near the university, rents, though high, are only a little higher than the state average. Rents have also increased only a little for houses and not at all for units in the past year.

The City of Campbelltown is a lower socio-economic area in the outer south-west of Sydney (Macarthur Region). It has a lot of housing built in the 1970s and 1980s but has recently diversified with higher density stock, and there is a very large manufacturing base there.

Campbelltown has a lot of housing suitable for first home buyers, and is one of the most affordable areas in Sydney. Nevertheless, the first quartile entry point is only 25% lower than the same point across Greater Sydney. But the median and third quartiles are only slightly higher, so that the third quartile “upgrader” housing price is only $85k higher than the first quartile. This indicates an “affordability wall”, where upgraders look outside the area and those looking to purchase in Campbelltown have a strict limit, so there is relatively little high end housing market there.

The City of Karratha, in north-west Western Australia, is a mining boom town built on iron ore and natural gas exports. It has a Gross Product of over $19 billion, making it Australia’s 5th largest economy. But the well publicised downturn in the iron ore price signalled the end of the mining boom, and where just two years ago, entry level houses in Karratha were fetching $1,300 per week in rent, these days it’s about half that. Though it’s still an expensive place to live compared to the rest of the state.

Where can you find housing values for your area?

If you are in local government and your council subscribes to economy.id, the housing value data has been added to your site.

The new housing data sits under the menu item “Housing market” on your economic profile. Historical data showing how house values have changed over time is available in the “Indicators” section of the site.