Peter Rossini

Housing affordability in Australia for first home buyers on moderate incomes

Purpose – This paper seeks to examine the opportunity for home ownership by first‐time buyers who are in occupations defined in the UK literature as key workers within four state capitals in Australia: Adelaide, Melbourne, Sydney, and Brisbane. Many of these workers are moderate or average income earners who deliver essential community services such as health, social services, education, safety and emergency services. This paper aims to explore access to home ownership for these workers for 2001 and 2009, a period which included the introduction and reintroduction of increased Australian government grants to first home buyers.Design/methodology/approach – The study determines, for each year, the zones of each city able to be afforded on a moderate single income as well as the percentage of suburbs able to be afforded by key workers.Findings – The paper identifies the pressure for multiple incomes in order to purchase as well as discussing the commuting distances some workers in Adelaide and Sydney may hav...

Measuring the influence of space and time effects on time on the market

This paper is concerned with spatial effects of time on the market for residential property and time varying relationships using a dataset of properties from the Adelaide metropolitan area, Australia, during the period 2002–2011. The analysis firstly considers the spatial dependence in time on the market and secondly extends the analysis to a space-time model using 2SLS regression. The findings demonstrate the complexity in spatial analysis with results indicating a random distribution of time on the market in 86% of observations a pattern that is consistent over time. Spatial autocorrelation is shown to increase time on the market in the subject property while spatial error decreases time on the market in the subject property suggesting a high level of market transparency and improved liquidity. The compensating or nullifying effects of both types of spatial association is shown to contribute to the random distribution observed in time on the market. A strong explanatory capacity of the business cycle suggests that economic drivers are leading time on the market rather than prices.

Measuring the impact of higher density housing development

Purpose – The introduction of higher density housing development within suburban areas has been favoured by state governments in Australia as a means of improving the efficiency of land use, reducing the costs associated with the delivery of government services and promoting home ownership. However it has been hypothesised that such development may have a negative impact on neighbourhood social structure, for example reducing diversity as measured by economic status and family makeup or in local housing market performance as measured by price. This paper aims to test this hypothesis.Design/methodology/approach – The methodology employs a quantitative approach with principal components analysis used to capture the main social structure of the Adelaide Statistical Division. Social constructs, the product of principal components analysis, are used to measure outcomes of higher density development as measured by community or household change.Findings – The results in this paper show that densification has had...

Factors Influencing Prices Paid in the Market for Temporary Water

Abstract This paper explores the factors which influence the willingness of irrigators to pay for water in temporary markets. The analyses are based on ten years of data using correlation, regression and time series techniques. The major drivers of price are: (i) water scarcity, as determined by seasonal availability of water; (ii) demand factors, as determined by precipitation and evaporation; and (iii) potential longterm losses incurred by irrigators with significant investments in water dependent infrastructure if insufficient water is used. These irrigators are willing to pay prices in excess of the value of water in productive use in order to protect their production and thereby the value of their assets.

An Analysis of the Returns from an Investment in Water Entitlements in Australia

Abstract Using thirteen years of market data from the Goulburn-Murray Irrigation District in Victoria, Australia, cash-flow analyses are used to assess returns that investors could have achieved through an investment in water entitlements under different cash-flow management scenarios. Cycle factor analyses were conducted to determine the extent to which entitlement prices follow allocation prices. Returns from investments in water entitlements seem to be higher but more risky than investments in the share market. The movement in prices of water entitlements and allocations are reasonably synchronized, while price fluctuations of allocation prices are about twice that of water entitlements

A Multivariate Study of Medium Density Housing Development and Neighbourhood Change Within Australian Cities

Abstract The introduction of medium density housing development within suburban areas has been favoured by government as a means of improving the efficiency of land use, reducing the costs associated with the delivery of government infrastructure and services, increasing the opportunity for affordable housing and balancing social mix. However, it has been hypothesised that such development may be having a negative impact on local neighbourhoods in terms of social structure; for example, reducing diversity as measured by economic status and family makeup or in terms of local housing market performance as measured by price. This paper considers whether such outcomes are able to be measured in terms of social structure and housing market performance for three Australian cities: Adelaide, Sydney and Melbourne between 2001 and 2006. The analysis is conducted at a disaggregated level to more accurately measure impacts at the local level. The paper attempts to identify whether medium density housing development has any impact on housing market performance at a suburb level as measured by median price and if there are associated changes in neighbourhood structure as measured by social constructs developed using the technique of principal components analysis.

Effectiveness of Project-Based Learning as a Strategy for Property Education

Abstract Project-based learning (PBL) is a student-centred instructional approach used to promote active and deep learning by involving students in investigating real-world issues in a collaborative environment. In this paper, we discuss how PBL was implemented in an introductory property course running in semester one, year one, which is offered in multiple modes of study. Two qualitative student surveys were conducted during the study period to solicit feedback from students on their learning experience. Comments from students suggested that PBL provides beneficial insight into the valuation process, and the field work and group exercises help motivate students and make the subject matter more interesting. University conducted, end of study period evaluations were used to compare the outcomes of the new course to other courses in the property program and the University. Finally, we identify a number of challenges in implementing PBL; these include workload issues, teachers ‘ content knowledge, lack of experience from both teachers and students, and the need to develop specialised material for off-campus study.

Evaluating returns in the residential rental sector

Purpose – This study seeks to determine an appropriate form of yield analysis as a means of improving the supply of low cost rental housing within Australia.Design/methodology/approach – Rental returns are quantified on a disaggregated basis based on the amalgamation of three major government property databases.Findings – Much of the information on returns in low cost rental housing is based on erroneous assumptions. More accurate reporting of returns would put in place the appropriate risk premium for investment in low cost rental housing.Originality/value – The study adds value by allowing policy makers to better understand the nature of returns required to increase the level of investment in the low cost end of the private rental market.

Cross sectional Analysis of time on Market indicators for an Australian City

Abstract This paper reports on a cross sectional analysis of Time on Market (TOM) for the residential property market of an Australian City. The focus is an analysis of TOM across location and by dwelling type, rather than over time, during a period of relative market stability. The study examines TOM for a three month period from September to November 2010 for the city of Adelaide, Australia which is a geographically isolated but active market with over 20,000 residential transactions each year. The study reports on the factors which impact on TOM when examined by region using both descriptive analysis and statistical modelling. Data used in the study results from combining sale transaction records from the South Australian Government with details of property marketing collected from advertisements in newspapers and websites. The research investigates relationships between TOM and dwelling type (detached, semi-detached and home units), location (ten regions) and house size (main rooms). It also compares first to last advertised price across location and for each property type. The research shows that location and house size both have a significant impact on TOM. Therefore, an important finding of the study is that factors such as location and dwelling size need to be held constant in any analysis of TOM over time.

EFFICACY IN MODELLING LOCATION WITHIN THE MASS APPRAISAL PROCESS

Abstract Although Geographic Information Systems (GIS) has long been recognised as a natural partner in the computer assisted mass appraisal (CAMA) process, it has not always been clear how CAMA management (practitioners) may be able to utilise this partnership to produce regular re-assessments at an acceptable level of accuracy and cost. The objective of this study is to help demonstrate how this may occur by examining the accuracy generated by various simple, transparent and cost effective approaches traditionally used to model location as part of the CAMA process and compare the accuracy of the predicted result to that generated by using an integrated GIS environment to model location. Models were constructed to account for ‘location’ in three ways. They are firstly, in an a priori fashion based on established suburb and post code administrative boundaries. Secondly, by utilising the GIS to generate location factors based on the residuals of location ‘blind’ global hedonic models and creating an interpolated location factor surface that can be applied to global hedonic models to give a predicted value. Finally, by using hedonic Geographically Weighted Regression (GWR) that allows the regression coefficients to vary across geographic space in response to local variation. These last two approaches take advantage of the parcel’s spatial coordinates to model location within a GIS environment. All three approaches are used to generate values using available secondary data normally collected as part of the determination of capital market value integrated within the spatial framework of a digital cadastre. The results indicate an acceptable degree of accuracy can be achieved when using basic hedonic GWR models that account for location in an intuitively simple way, thus providing transparency and efficiency to the mass appraisal process. GWR accounts for location giving comparatively more accurate results at little or no extra cost.