Location and capital gains


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Content type
Research report

September 1993

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During the 1980's there was a growing awareness that substantial capital was needed for urban infrastructure which was--collapsing or failing to keep up with -development in. many capital cities. In the same period there were large increases In property prices and and a number of changes in tax policy affecting housing. This paper returns to the issue of capital gains as a potentially important factor both nationally - a source of revenue for building and renewing. urban infrastructure - and for individual households - a determinant of a family's long term net costs or benefits from housing.

The paper reports on the development of a housing model for measuring capital gains and six other elements of housing benefits and costs and outlines the findings from analysis of two areas of Melbourne. The approach differs from a number of o the r s 1 in that it makes use of unit record information for individual families and properties rather than averages for groups or areas, providing greater opportunities for examination of the distribution of housing costs and benefits to different family types.

The work reported in this paper aims to compare levels of capital gains in a middle and outer suburb of Melbourne and to measure the principal economic costs and benefits enjoyed by owner occupiers. The paper begins with a brief outline of the major elements of data and methods used and then sets out some of the findings from the work done so far.

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