RDP 2019-01: Online Appendices: A Model of the Australian Housing Market Appendix D: Variable List

Trent Saunders and Peter Tulip

March 2019

Table D1: Construction Variables
Mnemonic Component Variable Unit of measurement Sector Appendix E equation ABS Cat No
baaavol Alterations and additions Building approvals Chain volume Total 3 8,731.0 – Building Approvals, Australia
bahouseavol Detached houses Building approvals Average quality (bahousevol /bahouseno) Total 43 8,731.0
bahouseno Detached houses Building approvals Number Total 44 8,731.0
bahousevol Detached houses Building approvals Chain volume Total 1 8,731.0
baotheravol Higher-density housing Building approvals Average quality (baothervol /baotherno) Total 45 8,731.0
baotherno Higher-density housing Building approvals Number Total 46 8,731.0
baothervol Higher-density housing Building approvals Chain volume Total 2 8,731.0
batotalno Total Building approvals Number Total 54 8,731.0
batotalvol Total Building approvals Chain volume Total 53 8,731.0
caavol Alterations and additions Commencements Chain volume Total 10 8,752.0 – Building Activity, Australia
caavol_private Alterations and additions Commencements Chain volume Private 51 8,752.0
caavol_public Alterations and additions Commencements Chain volume Public 13 8,752.0
chouseno Detached houses Commencements Number Total 4 8,752.0
chouseno_private Detached houses Commencements Number Private   8,752.0
chousevol Detached houses Commencements Chain volume Total 8 8,752.0
chousevol_private Detached houses Commencements Chain volume Private 47 8,752.0
chousevol_public Detached houses Commencements Chain volume Public 11 8,752.0
cotherno Higher-density housing Commencements Number Total 5 8,752.0
cotherno_private Higher-density housing Commencements Number Private   8,752.0
cothervol Higher-density housing Commencements Chain volume Total 9 8,752.0
cothervol_private Higher-density housing Commencements Chain volume Private 49 8,752.0
cothervol_public Higher-density housing Commencements Chain volume Public 12 8,752.0
ctotalno Total Commencements Number Total   8,752.0
ctotalno_private Total Commencements Number Private   8,752.0
ctotalvol Total Commencements Chain volume Total   8,752.0
ctotalvol_private Total Commencements Chain volume Private   8,752.0
comphouseno Detached houses Completions Number Total 6 8,752.0
comphouseno_private Detached houses Completions Number Private   8,752.0
compotherno Higher-density housing Completions Number Total 7 8,752.0
compotherno_private Higher-density housing Completions Number Private   8,752.0
ipd_aa Alterations and additions Investment deflator Index Private   ABS special request data
ipd_house Detached houses Investment deflator Index Private   ABS special request data
ipd_other Higher-density housing Investment deflator Index Private   ABS special request data
ipd_nanew New and used Investment deflator Index Private   5,206.0 – Australian
National Accounts:
National Income,
Expenditure and
Product
ipd_natdi Total Investment deflator Index Private   5,206.0
naaavol Alterations and additions Dwelling investment Chain volume Private 52 ABS special request data
nahousevol Detached houses Dwelling investment Chain volume Private 48 ABS special request data
naothervol Higher-density housing Dwelling investment Chain volume Private 50 ABS special request data
nanewvol New and used (i.e.
detached houses
and higher-density
housing		 Dwelling investment Chain volume Private 55 5,206.0
natdi Total Dwelling investment Chain volume Private 56 5,206.0
wdaavol Alterations and additions Work done Chain volume Private 16 8,752.0
wdhousevol Detached houses Work done Chain volume Private 14 8,752.0
wdothervol Higher-density housing Work done Chain volume Private 15 8,752.0
wdnewvol New and used Work done Chain volume Private   8,752.0
Table D2: Non-construction Data
Mnemonic Variable Appendix E equation Source Details
cash Interbank overnight cash rate 22 RBA statistical table F1.1 Interest Rates and
Yields – Money Market		 Quarter average
cash_exp Interbank overnight cash rate (includes market path for simulations)   RBA statistical table F1.1
RBA statistical table F17 Zero-coupon
Interest Rates – Analytical Series – 2009 to
Current		 Quarter average
inf_exp Expected inflation 29 ABS Cat No 6,401.0 – Consumer Price Index,
Australia
RBA statistical table G3 Inflation Expectations		 From 1986:Q3 we use quarterly averages of 10-year bond break-even rates; before this the data are spliced using five-year average growth of headline CPI
inc Household disposable income   ABS Cat No 5,206.0 Before interest adjustments, including unincorporated firms
rinc Real household disposable income 59 ABS Cat Nos 5,206.0 and 6,401.0 ‘inc’ deflated using seasonally adjusted trimmed mean CPI (‘tcpi’)
rinc_per_capita Real household disposable income per adult (15+ years) 21 ABS Cat Nos 5,206.0, 6,401.0 and 6,202.0 – Labour Force, Australia ‘rinc’ divided by adult population (‘wap’)
i_10y_bond 10-year government bond yield 25 RBA statistical table F2.1 Capital Market
Yields – Government Bonds
RBA historical statistical table F2 Capital
Market Yields – Government Bonds (monthly)		 Yields on Australian government bonds, 10 years maturity; quarter average
ndp Nominal housing prices 19 CoreLogic – Home value index All dwellings, hedonic, weighted eight capital cities; quarter average Available by subscription at <https://www.corelogic.com.au/>
rdp Real housing prices 19 ABS Cat No 6,401.0; CoreLogic ‘ndp’ deflated using trimmed mean CPI (‘tcpi’)
rent_cpi CPI rents 18 ABS Cat No 6,401.0  
rrent Real CPI rents 36 ABS Cat No 6,401.0 ‘rent_cpi’ deflated using seasonally adjusted trimmed mean CPI (‘tcpi’)
stock Housing stock, chain volume 40 ABS Cat Nos 5,206.0 and 5,204.0 – Australian
System of National Accounts; authors'
calculations		 See Appendix B.3
stock_no Housing stock, number 39 ABS Cat No 8,752.0; ABS Census (various years); authors' calculations See Appendix B.3
depreciation_rate Depreciation rate 42 Authors' calculations See Appendix B.3
demolition_rate Demolition rate 41 Authors' calculations See Appendix B.3
tcpi Trimmed mean CPI 34 ABS Cat No 6,401.0 Seasonally adjusted; excluding interest and tax changes; spliced using headline CPI for periods prior to 1982:Q1
uc User cost of housing 26 Fox and Tulip (2014)(a); authors' calculations See footnote 11 in the paper
uc_appreciation Expected housing appreciation 30 Fox and Tulip (2014)(a) Updated, then constant from 2017:Q3
uc_depreciation Expected housing depreciation 31 Fox and Tulip (2014)(a) Updated, then constant from 2017:Q3
uc_running_cost Running cost 33 Fox and Tulip (2014)(a) Updated, then constant from 2017:Q3
uc_stamp_duty Stamp duty cost   Fox and Tulip (2014)(a) Updated, then constant from 2017:Q3
uc_transaction_cost Transaction cost 32 Fox and Tulip (2014)(a) Updated, then constant from 2017:Q3
ur Unemployment rate 62 ABS Cat No 6,202.0  
vacancy Rental vacancy rate 17 Real Estate Institute of Australia (REIA) Average of mainland state capital cities (excluding Adelaide), weighted by dwelling stock (number of dwellings)
Available by subscription at <https://reia.asn.au/product/reia-reports-subscription-remf>
vmr Variable mortgage rate 23 RBA statistical table F5 Lending Rates From 2004:Q3 onwards, the series is the discounted variable mortgage rate for owner-occupier housing; for periods prior to 2004:Q3, the data are spliced using the standard variable mortgage rate for owner-occupier housing; further details on these series are available in the notes section of RBA statistical table F5
vmr_exp Expected mortgage rate 28   From 1997: vmr_exp=vmr+( i_10y_bond−cash )−( i_10y_bond−cash ¯ ) where the superscript bar represents the sample mean; from 1982 to 1997 we assume the expected variable mortgage rate is a constant spread (equal to its 1997 level) to the 10-year bond yield
rvmr_exp Real expected mortgage rate 27   ‘vmr_exp’ deflated using expected inflation (‘inf_exp’)
wap Adult (15+ years) population 20 ABS Cat No 6,202.0  
yield Rental yield 37   ‘rent_cpi’/‘ndp’, adjusted to have the same mean as matched sample estimate

Note: (a) R Fox and P Tulip (2014), ‘Is Housing Overvalued?’, RBA Research Discussion Paper No 2014-06