Housing submarket spillovers and COVID-19: the increasing influence of Australia’s regional cities

María B. Yanotti, Moses Kangogo and Danika Wright

Regional Studies, 2025, vol. 59, issue 1, 2502045

Abstract: We document a significant change in the relationship between metropolitan and regional house prices during the COVID-19 pandemic. Given regional centres are spatially disconnected in Australia, we introduce a novel approach to defining submarkets based on common amenity. Treating the COVID-19 pandemic period as a negative shock to urban demand, we find that metropolitan areas became net recipients of house price volatility, while regional markets became net influencers during the pandemic, reversing the pre-COVID-19 submarket spillover pattern. This paper provides an economic context for ongoing regional housing unaffordability and discusses current policy responses that should be considered to address these challenges.

Date: 2025
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DOI: 10.1080/00343404.2025.2502045

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