2015-12: Seasonality in Australian capital city house and unit prices (Working paper)
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Author(s)
Valadkhani, Abbas
Worthington, Andrew C.
Smyth, Russell
Griffith University Author(s)
Year published
2015
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In this paper we examine seasonality in house and unit (apartment) prices in the eight Australian state and territory capital cities (Adelaide, Brisbane, Canberra, Darwin, Hobart, Melbourne, Perth, and Sydney) using monthly data over the period December 1995 to July 2015. Employing a threshold autoregressive modelling approach, we determine in which months house and unit prices are, on average, more expensive or cheaper and in which capital cities seasonal price rises or falls are more significant. Our main finding is that sizable seasonal effects exist for both the very smallest (Darwin and Hobart) and very largest (Melbourne ...
View more >In this paper we examine seasonality in house and unit (apartment) prices in the eight Australian state and territory capital cities (Adelaide, Brisbane, Canberra, Darwin, Hobart, Melbourne, Perth, and Sydney) using monthly data over the period December 1995 to July 2015. Employing a threshold autoregressive modelling approach, we determine in which months house and unit prices are, on average, more expensive or cheaper and in which capital cities seasonal price rises or falls are more significant. Our main finding is that sizable seasonal effects exist for both the very smallest (Darwin and Hobart) and very largest (Melbourne and Sydney) capital cities and that these seasonal effects are mostly predictable. We find that the relative seasonal return variations are more significant for house than unit prices. Further, the observed month-of-the-year effects have undergone significant changes in almost all capital cities for both house and unit prices since the 2008 global financial crisis (GFC). For example, before 2008 the most and least, expensive months of the year to purchase houses in Melbourne were January (+1.08%) and November (-0.74%). However, the most and least expensive months after 2008 for Melbourne were July (+3.22%) and May (-2.52%). By utilising such seasonal variations, both buyers and sellers can make informed financial decisions.
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View more >In this paper we examine seasonality in house and unit (apartment) prices in the eight Australian state and territory capital cities (Adelaide, Brisbane, Canberra, Darwin, Hobart, Melbourne, Perth, and Sydney) using monthly data over the period December 1995 to July 2015. Employing a threshold autoregressive modelling approach, we determine in which months house and unit prices are, on average, more expensive or cheaper and in which capital cities seasonal price rises or falls are more significant. Our main finding is that sizable seasonal effects exist for both the very smallest (Darwin and Hobart) and very largest (Melbourne and Sydney) capital cities and that these seasonal effects are mostly predictable. We find that the relative seasonal return variations are more significant for house than unit prices. Further, the observed month-of-the-year effects have undergone significant changes in almost all capital cities for both house and unit prices since the 2008 global financial crisis (GFC). For example, before 2008 the most and least, expensive months of the year to purchase houses in Melbourne were January (+1.08%) and November (-0.74%). However, the most and least expensive months after 2008 for Melbourne were July (+3.22%) and May (-2.52%). By utilising such seasonal variations, both buyers and sellers can make informed financial decisions.
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Copyright © 2010 by author(s). No part of this paper may be reproduced in any form, or stored in a retrieval system, without prior permission of the author(s).
Note
Finance
Subject
C24 - Single Equation Models; Single Variables: Truncated and Censored Models; Switching Regression Models
R31 - Housing Supply and Markets
G14 - Information and Market Efficiency; Event Studies
House
apartment
price
seasonality
Australia