The relationship between house prices and demographic variables: An Australian case study

Author(s):

Richard Reed , (Faculty of Business and Law, Deakin University, Melbourne, Australia)

Citation:

Richard Reed, (2016) "The relationship between house prices and demographic variables: An Australian case study", International Journal of Housing Markets and Analysis, Vol. 9 Issue: 4, pp.520-537, doi: 10.1108/IJHMA-02-2016-0013

DOI

http://dx.doi.org/10.1108/IJHMA-02-2016-0013

Downloads:

The fulltext of this document has been downloaded 238 times since 2016

Abstract:

Purpose

The process for examining the value of house prices in an urban city has given limited attention, if any, to demographic variables associated with urban geography. Although the disciplines of property/real estate and demography have moved closer, little progress has been made when modelling house prices using population-related data in the field of urban geography to explain the level of house prices.

Design/methodology/approach

This paper proposes an innovative model to examine the influence of population variables on the level of house prices. It used a two-stage approach as follows: principal components analysis (PCA) identified social dimensions from a range of demographic variables, which were then retained for further analysis. This information was sourced from two Australian Bureau of Statistics censuses undertaken involving all Melbourne residents during 1996, 2001, 2006 and 2011; multiple regression analysis examined the relationship between the retained factor scores from the PCA (as independent variables) and established residential house prices (as the dependent variable).

Findings

The findings confirm the demographic profile of each household, which is directly related to their decisions about housing location and house prices. Based on a case study of Melbourne, Victoria, it was demonstrated that households with specific demographic characteristics are closely related to a certain level of house prices at the suburban level.

Originality/value

This is an innovative study which has not been previously undertaken for an extended period of time to facilitate an analysis of change over time.

Keywords:

Australia, Housing, Housing prices, Residential property, Real estate, Demography

Type:

Research Paper

Publisher:

Emerald Group Publishing Limited

Received:

03 February 2016

Revised:

21 April 2016

Accepted:

24 June 2016

Copyright:

© Emerald Group Publishing Limited 2016
Published by Emerald Group Publishing Limited
Licensed re-use rights only