Total Value of Dwellings methodology

This release contains estimates of the total value of Australia’s dwelling stock, and the median price and number of residential property transfers. These data were previously published in Residential Property Price Indexes: Eight Capital Cities, which ceased publication in the December quarter 2021.  

With the cessation of the indexes, the ABS has developed a new method for producing the first preliminary estimate of the total value of the dwelling stock.  This method is described under Total value of dwelling stock, Methodology, below.

The estimates of the total value of dwelling stock support the compilation of the non-financial assets component of the household balance sheet in the Australian System of National Accounts.

The median prices and number of property transfers provide measures of real estate market activity.

Estimates of the total value of all residential dwellings are presented in Table 1. Values of dwellings and land are used in compiling the non-financial assets component of the household balance sheet, which is published annually in the Australian System of National Accounts and quarterly in Australian National Accounts: Finance and Wealth.

Estimates of median price and transfer counts of established houses and attached dwellings, for capital cities and rest of state, are presented in Table 2. A transfer is defined as a change of ownership.

Dwellings in scope are:

• all residential properties in Australia
• restricted to dwellings where the primary purpose is residential, regardless of ownership and tenure of the occupants
• includes government owned properties and properties owned by private landlords
• excludes commercial properties

Dwelling types in scope are:

• Ordinary detached houses
• Houses with offices
• Houses with flats
• Rural residential houses (within a capital city and not part of a farming business)
• Semi-detached, row and terrace houses
• Townhouses
• Flats, units and apartments.

The data are compiled from analysis of a quarterly dataset of all Australian residential property sales. The sale price is the price agreed when contracts for sale are exchanged. The exchange date most closely approximates the time at which the market price is determined.

Sales are attributed to the relevant quarter depending on the date of exchange of contracts. Exchange date information is available for all jurisdictions except South Australia and the Northern Territory. For these jurisdictions, a modelled exchange date is used.

We classify the estimates of the total value of dwelling stock by the sector of ownership of the dwellings. The broad sector categories are Household and Non-Household. These sectors are defined in the Standard Institutional Sector Classification of Australia, 2008 edition. Estimates are allocated to sector of ownership based on proportions drawn from the most recent Census.

The definitions of dwelling structure type used in the median price and transfer counts statistics are consistent with the relevant ABS classifications:

• the Functional Classification of Buildings 1999 (Revision 2011), which is used in building activity statistics
• the Dwelling Structure Classification, which is used in the Census of Population and Housing (refer to Census Dictionary, 2016).

Capital cities are defined as Greater Capital City Statistical Areas, as described in the Australian Statistical Geography Standard, Vol 1. These areas capture the socio-economic extent of the state/territory capital cities for statistical purposes. This definition applies from the December quarter 2013.

For earlier periods, capital city regions are defined in terms of Statistical Divisions under the Australian Statistical Geography Classification. Historical naming conventions (for example, Sydney rather than Greater Sydney) have been maintained. A time-series is available but users should exercise caution in interpreting medians 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 these data, the capital city has been defined to be the whole of the ACT as from the December quarter 2013.

The portion of each state or territory outside its capital city region is referred to as the rest of state.

Where table headings indicate that the estimates relate to the rest of state, or the state or territory, the Australian Statistical Geography Standard is used to determine boundaries. For example, the total value of the dwelling stock relates to each state or territory.

All Australian residential property sales data are supplied to the ABS by CoreLogic. (See Appendix: CoreLogic disclaimer and copyright notices). This dataset is a combination of residential property sales data obtained from state and territory land titles offices or Valuers General offices, and real estate agents' data provided to CoreLogic. The ABS applies classifications to this dataset to create the residential property sales dataset from which the total value of dwelling stock, and the medians and transfer data, are produced.

Estimates of the total value of the dwelling stock are available in Table 1 and comprise three outputs:

• the mean price of residential dwellings
• the number (or quantity) of residential dwellings
• the total value of residential dwellings (which is an aggregation of the price and quantity components). 

For each quarter, we produce a 'first preliminary' estimate which we subsequently revise in the next two quarters. The methods that we use are different. The stratified estimation approach described below is not suitable for producing estimates for the most recent quarter. The method used for the most recent quarter is described separately in this section.

The geographic coverage of dwellings in scope of the value of the dwelling stock consists of all residential properties in Australia. From the dataset provided by CoreLogic, we use only the residential property sales data obtained from state and territory land titles offices or Valuers General offices in estimating the total value of the dwelling stock. Real estate agents' data provided to CoreLogic are excluded.

Stratified estimation approach

We use a stratified estimation approach to estimate the total value of dwelling stock. Price, quantity and value information is stratified by location (in terms of Statistical Area Level 2 in the Australian Statistical Geography Standard) and dwelling type (established houses and attached dwellings). 

We obtain a representative price for all dwellings in the stock from information about dwellings sold during the reference period. Price information from dwellings sold is used to represent the price of all dwellings not sold during the period. A quarterly mean dwelling price by geographic area and by dwelling type for all strata is calculated. 

The first step in calculating the number of dwellings for each stratum is estimating the number of residential dwellings in each state. The number of residential dwellings is calculated by taking counts of dwellings from the latest Census and adjusting these counts for net additions to the stock since the last Census. These net additions are calculated by taking dwelling completions data from Building Activity, Australia and adjusting the completions data by the long term realisation rate (the long term average rate at which completions result in net additions to the stock).

We pro-rate the total number of residential dwellings calculated at the state level down to each Statistical Area Level 2. As completions data are not available in time for use in compiling the most recent quarter's estimates, and are not available below state/territory level, quantity information for the latest quarter is modelled using historical trends.

To compile the total value of dwelling stock we combine price and quantity data in each Statistical Area Level 2, which is then aggregated up to the state/territory and national level. Information from the Census is used to further break down total value information into Household and Non-Household sector ownership.

Estimation approach for first preliminary estimates

Lags can occur in the transmission of property sales data. As a consequence, there are insufficient property transactions to apply the stratified estimation approach for the most recent quarter. Instead, for the latest quarter, we estimate directly the mean change in property price at the state and territory level. The movement of the CoreLogic Hedonic Home Value Index, for all dwellings, at the state or territory level is used as a proxy for the change at the state and territory level. This method results in estimates that are preliminary for this period.

Before the March quarter 2022, the movement in the ABS’s Residential Property Price Index (at the capital city level) was used as a proxy for movements in the mean price (at the state or territory level) for the most recent quarter.  The Residential Property Price Index was discontinued after the December quarter 2021.

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. 

For the total value of the dwelling stock, mean prices are calculated from unrounded figures and subsequently rounded. Therefore, estimates of the components published in Table 1 cannot be combined to replicate the total values.

The separate approach used in calculating the first preliminary estimate of the total value of dwelling stock has been described in the preceding paragraphs.

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

Once the estimates are final, revisions would occur only in exceptional circumstances, such as to correct a significant error.

Further information about the methodology used to compile the total value of the dwelling stock is available in Total Value of Dwellings: Concepts, Sources and Methods.

In addition to the total value of dwelling stock and its components, the ABS publishes in Table 2, for each capital city and the rest of state:

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

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.

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.

The data are released about twelve weeks after the end of the quarter to which they relate.  Available free of charge on the ABS website www.abs.gov.au are:

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

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

From the March quarter 2014, 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 this data source compared to the previous data source (which contained Valuers General data only). Therefore, users should apply caution when comparing median price and transfers data prior to March quarter 2014 with data for the March quarter 2014 and later periods.

An updated residential property sales dataset supplied by CoreLogic was implemented from the December quarter 2018. This resulted in revisions to the median price and transfers series. The ABS revised these series back to March quarter 2014, when CoreLogic data was introduced into the series.

The release of data from the 2016 Census of Population and Housing allowed the ABS to update the benchmarks used to compile the total value of dwelling stock. An updated series using data from the 2016 Census commenced in the September quarter 2016, and was introduced in the December quarter 2018 issue of Residential Property Price Indexes: Eight Capital Cities. A two year window was used to smooth-in the change for the series relating to the Household sector, and a four year window was used for the Non-Household series. This approach is in line with standard ABS practice for introducing changes, and does not affect the interpretation of the data.

Please also see the above discussion of revisions, for each group of outputs, under Data processing. 

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.

For more detailed information about the data presented in this publication, refer to Total Value of Dwellings: Concepts, Sources and Methods.

Current publications and other products released by the ABS are listed on the ABS website https://www.abs.gov.au. The ABS also issues a daily Release Advice on the website which details products to be released in the week ahead.

The total value of dwelling stock series commenced in the September quarter 2011. Data relating to the total value of dwelling stock was previously published in Table 6, Value of residential dwellings, all series, in Residential Property Price Indexes: Eight Capital Cities, until December quarter 2021.

The ABS ceased production of residential property price indexes in the December quarter 2021. Accordingly, the method for compiling the total value of dwelling stock series has changed from the March quarter 2022. See above, under Total value of dwelling stock, Methodology, for further information.

Similarly, data relating to median prices and dwelling transfer counts was previously published in Table 4 and 5, Median price (unstratified) and number of transfers (capital city and rest of state), in Residential Property Price Indexes: Eight Capital Cities, until December quarter 2021.

The underlying concepts, sources and methods of the Residential Property Price Indexes: Eight Capital Cities are described in Residential Property Price Indexes: Concepts, Sources and Methods.