Sydney housing market causes shocks for other cities
Sydney’s high housing prices are spilling over into other cities, a report has claimed.
Research by the University of New South Wales has claimed Sydney’s property market creates price shocks that spill into other capital cities, the ABC has reported. The study found that Hobart was the capital city most impacted by high property prices in Sydney, while Perth and Darwin were the least affected.
The study examined median house price and rent data from the early 1980s until 2015, the ABC said. Report author Associate Professor Glenn Otto then modelled how variations in capital gains and rental returns in each capital city impacted returns in other capital cities.
"We shouldn't think of Australian housing markets as being completely isolated," Otto said.
Otto said the spillover of property performance from one market into another was likely due to investors.
"Australian cities are quite isolated so we wouldn't necessarily expect people to be picking up and moving between cities in response to changes in property prices. To that extent investors may be becoming an increasingly important part of the housing market, maybe that's one mechanism by which we can see this kind of effect of one city being transferred to another city,” he said.
Otto’s findings echo recent figures from CoreLogic, which showed strong price growth for Hobart.
“We’re seeing some reasonably strong growth in Hobart and Canberra, fed mainly by people in Sydney and Melbourne buying for investment or lifestyle,” CoreLogic researcher Cameron Kusher told finder.com.au.