Investigating residential property markets using employment data

The changing nature of residential housing markets is due to a large number of influences, although some factors have a larger effect than others on house values. Whilst it is extremely difficult to completely disaggregate all influencing factors, it is possible to highlight areas that have a strong relationship with property – one of these is employment. Due to the growing importance between housing affordability and the capacity to meet the cost of living the form of regular mortgage repayments or rent, there are clear links between the cost of housing and the ability to pay for the housing product.

The research investigates the links between residential housing markets as measured by the level of house prices and employment as measured by industry sector employment. It focuses on Local Government Areas in the State of Victoria, Australia and examines change over a ten year period between 1991 and 2001 using census and house price information. It is supported by data sourced from the Australian Bureau of Statistics and the Victorian Government’s Valuer General’s Office. The analysis also considers changes in these employment sectors from Australia’s overall perspective, as well as comparison with changes in Victoria’s overall employment trends. It is assisted by a spatial representation of three shiftshare components and property values with the assistance of a geographical information system (GIS).