Tracking Residential Real Estate Capital Growth in NSW by Constructing a Price Index from Sales Transactions

Abstract

The main objective of this paper is to investigate residential real estate capital growth in the state of NSW (Australia). Tracking capital growth has been instrumental for tracing price variations and value growth of residential real estate. More specifically, residential real estate past sales transactions can be utilized to track capital growth using repeat sales approach. Ordinary least squares method was used to fit a linear model and construct a price index. The results were used to establish a yearly and quarterly price index for the whole state as well as for each respective district. The research shows that while using a mean price as a measure for tracking growth can produce misleading results, the capital growth tracking can be carried out more accurately by the means of investigating repeat sales. Furthermore, the research reveals trends in the property market as well as areas with the highest and lowest growth. The results produced can help investors, banks, and government organizations to compare capital growth across different districts at different times and drive lending, investment, or development decisions.

Received: 13 July 2023 | Revised: 14 August 2023 | Accepted: 31 August 2023

Conflicts of Interest

The authors declare that they have no conflicts of interest to this work.

Data Availability Statement

The data that support the findings of this study are openly available in [Australian Bureau of Statistics] at https://www.abs.gov.au/statistics/standards/australian-statisticalgeography-standard-asgs-edition-3/jul2021-jun2026 and in [Valuer General NSW Valuation Portal] at https://valuation.property.nsw.gov.au/embed/propertySalesInformation.

Author Contribution Statement

Emad Nashed: Conceptualization, Methodology, Software, Validation, Formal analysis, Investigation, Resources, Data curation, Writing - original draft, Visualization. Michael Baron: Conceptualization, Methodology, Validation, Formal analysis, Investigation, Resources, Data curation, Writing - review & editing, Supervision, Project administration.