Understanding the interconnectedness of house prices between cities and regions during COVID-19: evidence from Australia

While several studies analyse house price linkages within cities or regions, none estimates the impact of the COVID-19 pandemic on housing price dynamics between cities and regions. We fill this gap in the literature by examining a network of core and regional cities in Australia using Diebold-Yilmaz's network variance decomposition approach of 2012. Compared with the pre-pandemic period, the pandemic caused significant change, with core cities significantly linked to regional cities and driving volatility in housing prices. The findings of our study have important implications for real estate investors as well as urban and regional planners.