Analysing the impact of COVID‐19 on urban transitions and urban‐regional dynamics in Australia

Christian A. Nygaard and Sharon Parkinson

Australian Journal of Agricultural and Resource Economics, 2021, vol. 65, issue 4, 878-899

Abstract: In this paper, we draw on insights from economic theory on urban growth, large shocks and spatial dynamics to assess COVID‐19 flow‐on effects and potential disruptive legacy in urban‐regional dynamics. Urban dynamics in Australia are assessed at national, regional and intra‐urban scales. Long‐term and short‐term urban dynamics are analysed against random growth, locational fundamentals and increasing returns theories of urban growth and adjustment. A focus in Australia and elsewhere is the potential effect of COVID‐19 on where people want to live, enabled in part by technological connectivity that releases some workers from proximity to work constraints when choosing a home. Our results suggest that urbanisation trends and adjustments to shocks differ for capital cities and noncapital cities. At the inter‐regional migration level, Australia’s largest urban system, Sydney, is characterised by a cointegration relationship between outmigration and Sydney property prices relative to other housing markets. At finer spatial scales, COVID‐19 had a negative impact on house prices within Sydney and may, for some micro‐geographies and/or towns and regional centres, lead to significant change. However, typically this effect on houses (not units) began to dissipate in the period June‐November 2020, when also controlling for housing policy pre‐ and post‐COVID‐19.

Date: 2021
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