RDP 2006-08: A Survey of Housing Equity Withdrawal and Injection in Australia Appendix D: Variable Definitions and Summary Statistics

Carl Schwartz, Tim Hampton, Christine Lewis and David Norman

August 2006

Three types of variables were used in the logit regressions presented in this paper: numerical variables; categorical variables; and dummy variables.

Numerical variables include the (absolute) value of housing equity withdrawal and injection. Housing assets and housing equity are also numerical variables and are for all properties. Housing equity withdrawal and injection, and housing assets and equity enter in logarithmic form. The LVR for each household is based on all houses and loans held by that household. Capital gains are annualised (calculated across all properties) and include unrealised capital gains. The current value of each house was subjectively determined by survey respondents.

Where the household's response to questions on housing asset values or loan balances produced clearly implausible estimates, the variables were adjusted if sufficient information existed to correct the answer. Where there was insufficient evidence to be certain of the correct response, the household was excluded from the regression.

Categorical variables include age (eight five-year intervals) and income (ten $5,000 intervals and nine $10,000 intervals). When used in the regression, these variables were converted to a dollar value by taking the midpoint of each range.

The remaining regression variables entered as dummy variables. These were, in general, defined by the household's response to a multiple choice question.

In most cases, the explanatory variables were defined according to the household's situation at the beginning of the year, to avoid problems of endogeneity. The exceptions to this were being ahead of schedule on loan repayments and the various loan features, which are only available as responses during the course of the year.

Table D1 presents some additional summary statistics from the survey.

Table D1: Characteristics of Property Ownership
As at December 2004
  Units Owner-occupied property Investment property Second home/land All properties
By property
Median value $ 320,000 270,000 230,000 300,000
Median capital gain $ 175,000 90,000 98,000 154,000
Median time held Years 10 4 4 8
Share with debt outstanding Per cent 50.2 59.7 42.1 51.2
Median debt outstanding $ 104,500 154,000 100,000 111,600
Median LVR Ratio 0.33 0.58 0.57 0.39
By household
Share owning that property Per cent 72.2 9.8 5.0 74.3
Median total assets $ 345,000 817,500 650,000 340,000
Median total property debt $ 108,000 310,000 161,000 109,000
Median total LVR Ratio 0.33 0.41 0.41 0.34
Notes: Households could provide multiple responses for the purpose for which they owned properties other than their home. Properties were classified as investment properties if one of these purposes was to rent it out. Debt and LVR are only for properties that had debt outstanding.