Wednesday, November 19, 2014

"Peak Car" in Australia

Following a discussion on young people driving trends in Australia posted on the ITS LinkedIn page by Alexa Delbosc, one of my colleagues, here I am posting a few graphs showing an apparent "Peak Car" in Australia.

The total VKT (in million) between 1965 and 2012 in Australia is shown first. What I see in this graph is an increasing trend. However, if you look more closely you may notice that the increase rate is actually going down a little bit (the slope becomes smaller).
The slowing down rate is more obvious when I plot the change in total VKT from year n-1 to year n as shown below. The change in VKT has been fluctuating year to year. However, I see a general decreasing trend there.
And now if we divide the total VKT by total population to get the VKT per capita, we can see a peak in the graph happened in 2004. This is 3-4 years before the Global Financial Crisis (GFC)!
This is actually very interesting because the decline in VKT per capita in the US started in 2006, about 1-2 years before the GFC (reference). It was also in 2006 when the American housing market had a burst with house values peaking (reference).

Did a same thing happen in Australia? Is there really a relationship between housing prices, income, and people's driving trends? I'll get back to this question with some data from Australia in a bit.

Here is the change in VKT per capita from year n-1 to year n. I see a similar decreasing trend with many fluctuations.
Going back to the question on the relationship between housing boom and driving trends, here is also some data from Australia showing a "local" (not global) housing boom in 2003-2004 about the same time as the apparent "Peak Car" happened. The graph below shows the ratio of median residential house price over the annual wage & salary in Australia. Data is from ABS and REIV.

Does this mean people started shifting their behavior towards less consuming (fuel/driving) because they were too in debt on their housing costs? I don't have a certain answer yet. After a local boom in housing prices in 2004, there has been a relatively stable (on average) period until more recently.
The other question which still remains open is "will this trend continue?" To answer this question, we need to understand why we see what we see. If we figure out the driving factors that push VKT up or down, then we may be able to forecast the future. Forecasting is a difficult task.

UPDATE: Following you'll see a few more graphs for fuel price, fuel budget, unemployment rate, and young adult (18-34 years old) proportion.

What is fuel budget?
Fuel budget is defined as the budget that a person spends on fuel in a year.

How did we estimate fuel budget?
Fuel budget = fuel price [$/liter] x average fuel consumption [11.5 liter/100 km] x VKT per capita [km/person/year]


  1. Meead, have you looked at fluctuations in petrol prices and % of household income spent on car use?

  2. Thanks for the comments. Yes, I have the graph for the petrol price but not the actual expenditure of households on car use. However, we estimated a surrogate measure called fuel budget using the average VKT per capita, fuel price, and an average fuel consumption rate. I'll update the post, so you can see those graphs too.

  3. Thanks. I think one clear factor should be where and in what type of dwellings people live, e.g. inner city apartments with little or no parking are becoming far more common. The question might be is the housing type driving the lower car use, or is it the other way around. Both probably. Peter S

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