News Report Is Revealing
According to a News.com.au article source, the astronomical property prices of Sydney has created market shocks that have spilt over to other state capitals.
New research even shows that Hobart is one of the worst affected.
“We shouldn’t think of Australian housing markets as being completely isolated. It’s not the case that whatever happens in Sydney doesn’t have any implications for what happens in other housing markets,” explained University of New South Wales Associate Professor Glenn Otto, the author of the research.
The professor looked into the median house prices and rents from early 1980 up to 2015. He created a model that also looks into the variations in capital gains and rental returns in each of the cities affected, their impact on other cities for 12 periods.
“You historically don’t see a big share of Brisbane or Melbourne type shocks spilling over to other markets,” noted Otto.
“From time to time, you’ll get predictions that we’ve built too many units in the Melbourne housing market and there’s an oversupply and it’s specific to these markets, so we’ll see some price correction.
“The thing I was interested in, looking at the historical data, was to what extent that correction won’t be specific to the particular market but also will feed through to other markets,” said Professor Otto.
Among the regions assessed, it appears that Perth and Darwin’s housing market are not as much affected as that of Hobart, Canberra and Brisbane.
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