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Internal Migration and House Prices in Australia

Author

Listed:
  • Isil Erol

    (University of Reading)

  • Umut Unal

    (University of Marburg)

Abstract
Australia is one of the most mobile countries in the world through internal migration, which is an overlooked part of population change. This study provides the first empirical evidence for the impact of internal migration inflow on house price changes across 237 statistical regions in Australia from 2014 to 2019. Employing a spatial correlation approach and constructing a novel instrumental variable that matches the shift-share instrument used in the immigration literature, the paper indicates that population mobility increases housing prices in migration receiving regions. Internal migration that amounts to 1% of the initial local area population is associated with a 0.7% to 0.8% increase in house prices in the three most populated states of Australia. The results provide further suggestive evidence that migration inflow has a significant positive effect on house price changes in metropolitan areas of New South Wales and Victoria – i.e., Capital Cities of Sydney and Melbourne – rather than non-metropolitan regions.

Suggested Citation

  • Isil Erol & Umut Unal, 2021. "Internal Migration and House Prices in Australia," MAGKS Papers on Economics 202113, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    • Handle: RePEc:mar:magkse:202113
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    File URL: https://www.uni-marburg.de/en/fb02/research-groups/economics/macroeconomics/research/magks-joint-discussion-papers-in-economics/papers/2021-papers/13-2021_erol.pdf
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    Citations

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    Cited by:

    1. Umut Unal & Bernd Hayo & Isil Erol, 2022. "The Effect of Immigration on the German Housing Market," MAGKS Papers on Economics 202238, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    2. Isil Erol & Umut Unal, 2021. "Local House Price Effects of Internal Migration in Queensland: Australia’s New Interstate Migration Capital," MAGKS Papers on Economics 202124, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

    More about this item

    Keywords

    Internal migration; Housing prices; Australia; Instrumental variables;
    All these keywords.

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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