GROSS IMPUTED RENT FOR OWNER-OCCUPIED DWELLINGS

Produce base rental yields for owner-occupied dwellings in SIH 2011–12

Step 1.1 Calculate a preliminary rental yield for each SA1

This section summarises the methodology for producing base rental yields from the 2011 Census based on SA1. This process was repeated for the 2006 Census except that the geographical region was the Collection District (CD) instead of the SA1.

(a) Prepare Valuers General (VGs) dwelling sales data

Pool two years VGs data (2010-11, 2011-12)

Let i = dwelling in VGs data
= sales price of ith dwelling in an SA1
= total number of dwellings in an SA1

Then – Discard any SA1 where < 5

– Calculate mean dwelling sales price () for each remaining SA1 as:

(b) Prepare Census rental records

– Retain Census market rental records, discarding the dwellings for:

• owner-occupiers;
• residents living in caravan parks; and
• rental records out of scope of SIH (in very remote regions).

(c) Merge VGs and Census record dataset
– Attach respective [from (a)] to each Census rental record [from (b)]
– Discard any Census records with no

(d) Calculate preliminary rental yield

Let = rental dwelling in Census
= weekly rent paid for th dwelling
= mean VGs dwelling price for SA1 of th dwelling [from (c)]

Then – For each Census rental record, calculate preliminary rental yield ( ) as:



Step 1.2 Stratify Census rental records

– Define strata (): state × section of state × number of bedrooms × dwelling type × Socio Economic Index for Areas, Index of Relative Socio Economic Advantage and Disadvantage (SEIFA IRSAD) quintile

– 100 strata created for each state; 70 strata for NT; and 55 strata for ACT; 725 in total across Australia (see Appendix 3)

Step 1.3 Estimate a final base rental yield for each stratum

Let = final base rental yield for a stratum s
Ns = total number of dwellings paying rent in a stratum s

Then – Calculate final base rental yield as median of preliminary rental yields for a stratum s,i.e.

Note: If < 5 for any stratum, then the for another stratum with similar characteristics and geographic location is used

Produce base rental yields for owner-occupied dwellings in SIH 2005-06

– Repeat the same procedure outlined above for the Census 2006 file
– Smallest geographical area is Collection District (CD) instead of SA1

Estimate gross imputed rent for dwellings in base SIH cycles

Note: Base SIH cycles are those SIH conducted at around the same time as a Census, i.e. SIH 2005-06 and SIH 2011-12. The next base cycle will be SIH 2015-16 for the 2016 Census.

Let = gross imputed rent for owner-occupied dwelling k
= SIH estimated sale price of owner-occupied dwelling k

Then – Calculate GIR for kth owner-occupied dwelling as its corresponding stratum rental yield () multiplied by the SIH estimated sale price of kth dwelling belonging to stratum, i.e.

Produce intercensal rental yields for owner-occupied dwellings

Step 2.1 Calculate mean rental yields for each state/territory using SIH data

Let = mean rent paid by market renters in state/territory tin SIH

= mean estimated sale price of owner-occupied dwellings in state/territory tin SIH

– SIH 2005-06: base cycle for SIHs 2003-04, 2007-08 and 2009-10
– SIH 2011-12: base cycle for SIH 2013-14

Then – Calculate mean rental yield () for each state/territory t in intercensal SIH cycles (1) and base SIH cycles (0) as:

and

Step 2.2 Calculate rental yield adjustment factors for intercensal SIH cycles

– Calculate a rental yield adjustment factor () for each state/territory tand SIH cycle (from 2003-04 to 2013-14) as:

Step 2.3 Calculate strata rental yields for intercensal SIH cycles

– Calculate an adjusted rental yield () for each SIH stratum () using final base rental yields ( from step 1.3) and corresponding state/territory adjustment factor () (from step 2.2) as:

Estimate gross imputed rent for intercensal SIH cycles

– Calculate gross imputed rent estimates for kth owner-occupied dwelling () using adjusted rental yields () (from step 2.3) as:



GROSS IMPUTED RENT FOR OTHER TENURE TYPES

Estimate gross imputed rent for other tenure types

(a) Base SIH cycles

For the base SIH cycles, SIH 2005-06 and 2011-12:

Let = gross imputed rent for other tenure type dwellings in each SIH
= rent paid by market renters in a given stratum () from Census
Ns = total number of market renters in a given stratum () from Census

– Using the same strata defined for owner-occupied dwellings () (see Appendix 3), impute market rent values for base cycles (0) by calculating the median market rent in stratum from Census data, i.e.

(b) Intercensal SIH cycles

Let = mean rent paid by market renters in state/territory t in SIH
= market rent adjustment factor in state/territory t in SIH

Then – Calculate a market rent adjustment factor () for state/territory t in each intercensal SIH cycle (1) as:

– Estimate intercensal gross imputed rent for other tenure type dwellings in SIH as: