Geoscience Australia (GA) has developed the Earthquake Risk Model (EQRM) as an open source software for probabilistic earthquake hazard and risk assessment. In the EQRM earthquake vulnerability models for HAZUS building types are defined with finer subclasses to account for Australian residential building types. An example is W1TIMBERTILE which represents Timber frame with timber walls and tiled roof. The methodology implemented in the EQRM to compute the likelihood of physical damage state and the economic loss is similar to the HAZUS methodology, which is based on the capacity spectrum method applied to a generalized Single-Degree-Of-Freedom (SDOF) model of the building. The building capacity parameter values for the Australian residential timber and URM buildings were determined primarily from engineering judgment with reference to parameter values provided by HAZUS and some experimental data. This study aims to determine new capacity parameter values for the Australian residential timber and URM buildings using building damage data from two damaging earthquakes: M5.6 Newcastle (1989) and M5.0 Kalgoorlie (2010). The Newcastle damage data is compiled from insurance claim data, from which the economic loss ratio is estimated for four building types: timber structure built before and after 1945 and URM built before and after 1945. The Kalgoorlie damage data is compiled from a detailed population based survey undertaken by GA, from which economic loss ratio is estimated for URM buildings. In both instances the loss ratio data is matched to felt ground shaking intensity (MMI). The compiled building damage data are then used as a reference to determine capacity parameter values of the selected building types. The new vulnerability models for the selected building types are compared with the current models, and the effect of the modifications is highlighted and discussed in a scenario risk assessment for the building portfolio in Newcastle and Kalgoorlie, Australia.