What is it about?
This study aims at detecting bubbles in the different regions of Greater Sydney.
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Why is it important?
Our cointegration results show no evidence of cointegration between real house prices and rent in the western region. However, there is strong evidence of cointegration in the eastern and northern regions. This confirms the existence of housing submarkets in Greater Sydney and an indication of housing price bubbles in Western Sydney. Further, the formal BSADF bubble tests reveal strong evidence of explosive price bubbles in Western Sydney, while there is no comparable evidence for the other regions of Sydney, which further highlights the importance of submarket analysis.
Perspectives
This contributes to the ongoing debate on regulating housing investment activities, particularly the use of negative gearing.
Mustapha Bangura
University of Technology Sydney
Read the Original
This page is a summary of: Housing price bubbles in Greater Sydney: evidence from a submarket analysis, Housing Studies, August 2020, Taylor & Francis,
DOI: 10.1080/02673037.2020.1803802.
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