Internal migration and house prices in Australia

Figures & data

Figure 1. Net overseas migration (a) and net interstate migration (b) in five main states of Australia.

Source: Australian Bureau of Statistics (ABS) 34120 Migration, Australia.

Figure 2. (a) Total migration inflows in New South Wales, Victoria and Queensland; and (b) total migration inflows in greater capital city statistical areas (GCCSA) and rest of state statistical areas (RSSA).

Source: Calculated by the authors.

Table 1. Descriptive statistics.

Variables	Mean	SD	Minimum	Maximum
$\mathrm{\Delta }$log Median House Sale Price	0.041	0.079	−0.416	0.257
Migrants at t – 1/Resident Population at t – 2	0.091	0.026	0.037	0.179
Number of Dwellings Approved at t – 1/Population at t – 1	0.008	0.007	0.000	0.073
Unemployment Rate at t – 1	5.683	2.513	1.260	22.900
Δ log Median Wage at t – 1	0.024	0.015	−0.086	0.113
Δ log Number of Jobs at t – 1	0.015	0.031	−0.122	0.176
log Land Area	10.850	2.596	6.971	17.951
Coastal Dummy	0.245	0.431	0.000	1.000

Note: $\mathrm{\Delta }$ represents the first difference.

Table 2. Internal migration inflows and house price changes with instrument.

	IV estimation results
Variables	[1]	[2]	[3]	[4]	[5]	[6]	[7]	[8]	[9]
Migrants at t – 1/Resident Population at t – 2	0.429*** [0.022]	0.406*** [0.048]	0.617*** [0.047]	0.712*** [0.071]	0.638*** [0.093]	0.667*** [0.086]	0.628*** [0.087]	0.518*** [0.009]	0.709*** [0.116]
log Land Area			−0.005*** [0.001]	−0.009*** [0.001]	−0.008*** [0.001]	−0.008*** [0.001]	−0.006*** [0.001]	−0.006*** [0.001]	−0.008*** [0.001]
Coastal Dummy			0.008** [0.003]	0.004 [0.004]	0.005 [0.004]	0.005 [0.004]	0.009** [0.004]	0.008** [0.004]	0.005 [0.004]
Unemployment Rate at t – 1			0.002** [0.001]	0.002*** [0.001]	0.002*** [0.001]
Δ log Median Wage at t – 1				1.066*** [0.223]	1.160*** [0.242]	1.157*** [0.242]	1.157*** [0.240]	1.175*** [0.241]	1.161*** [0.241]
Δ log Number of Jobs at t – 1					0.261* [0.158]	0.268* [0.162]	0.280** [0.160]	0.256 [0.164]	0.260 [0.168]
Rest of States *[Migrantst – 1/Resident Populationt – 2]							−0.169*** [0.043]
Sydney–Melbourne *[Migrantst – 1/Resident Populationt – 2]								0.264*** [0.064]
Brisbane *[Migrantst – 1/Resident Populationt – 2]									−0.063 [0.065]
First-stage IV coefficient	1.119*** [0.038]	1.056*** [0.103]	0.922*** [0.134]	0.973*** [0.087]	0.947*** [0.103]	0.963*** [0.100]	0.975*** [0.102]	0.926*** [0.119]	0.908*** [0.128]
Kleibergen–Paap F-test	888.5	104.8	47.1	125.0	85.0	93.6	90.7	60.4	50.2
Kleibergen–Paap rk LM test	178.4 (0.000)	136.2 (0.000)	89.5 (0.000)	73.5 (0.000)	75.9 (0.000)	88.4 (0.000)	86.3 (0.000)	64.6 (0.000)	79.4 (0.000)
Observations	1112	1112	1112	880	880	880	880	880	880
R^2	0.24	0.41	0.43	0.61	0.61	0.61	0.62	0.62	0.61
Year fixed effects	No	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
State fixed effects	No	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes

Note: SA3-level clustered standard errors are shown in brackets, p-values in parentheses, $\mathrm{\Delta }$ indicates the first difference. *Significant at 10%; **significant at 5%; and ***significant at 1%. Bold values are statistically significant coefficient estimates.

Table 3. Relationship between origin SA3-level area shares and local area characteristics.

	Brisbane Inner			Mudgeeraba			Coolangotta			Noosa			Buderim			Bartik instrument
	Brisbane Inner-North	Brisbane Inner-West	Holland Park	Brisbane Inner-East	Sherwood–Indooropilly	Coolangotta	Southport	Tweed Valley	Broadbeach–Burleigh	Mudgeeraba–Tallebudgera	Robina	Nerang	Gympie–Cooloola	Noosa	Nathan
Unemployment rate	−0.246	0.162	0.388	−0.271	0.698	−0.140	−0.153	−0.302	−0.283	−0.154	−0.190	−0.050	0.142	0.387	−0.247	−0.856
	[0.299]	[0.396]	[0.517]	[0.269]	[0.490]	[0.238]	[0.447]	[0.389]	[0.373]	[0.375]	[0.310]	[0.322]	[0.283]	[0.384]	[0.298]	0.878
Land area	0.000	0.000	0.000	0.000	0.000	0.000	0.000	0.000	0.000	0.000	0.000	0.000	0.000	0.000	0.000	0.000
	[0.000]	[0.000]	[0.000]	[0.000]	[0.000]	[0.000]	[0.000]	[0.000]	[0.000]	[0.000]	[0.000]	[0.000]	[0.000]	[0.000]	[0.000]	0.000
Median wage	0.132*	0.111	0.163	−0.108	0.112	−0.139	−0.084	−0.089	−0.042	−0.116	−0.214	−0.038	−0.161	−0.193	0.156	0.159**
	[0.076]	[0.109]	[0.107]	[0.096]	[0.111]	[0.116]	[0.231]	[0.117]	[0.185]	[0.136]	[0.156]	[0.131]	[0.108]	[0.174]	[0.215]	0.079
Number of jobs	0.027	0.046*	0.026	0.021	0.041	0.002	−0.017	−0.022**	0.000	−0.007	−0.016	−0.010	0.077**	0.101	−0.001	0.101**
	[0.021]	[0.027]	[0.020]	[0.028]	[0.028]	[0.008]	[0.016]	[0.010]	[0.027]	[0.013]	[0.012]	[0.014]	[0.034]	[0.061]	[0.045]	0.051
Coastal dummy	−0.024	−0.137	−0.195	0.017	−0.259**	−0.114	0.289	−0.089	−0.069	−0.168	−0.133	0.028	−0.153	−0.262	0.129	0.191
	[0.133]	[0.186]	[0.127]	[0.133]	[0.130]	[0.158]	[0.368]	[0.103]	[0.164]	[0.188]	[0.212]	[0.224]	[0.123]	[0.204]	[0.311]	0.163
Observations	327	327	327	327	327	327	327	327	327	327	327	327	327	327	327	327
R^2	0.084	0.075	0.030	0.024	0.090	0.06	0.008	0.103	0.041	0.004	0.051	0.022	0.118	0.056	0.053	0.257

Note: The number of observations is 328 – 1 = 327 as the relevant SA3 region in our dataset is receiving migration from all SA3-level areas across Australia except itself. The top row indicates the name of the recipient SA3-level area, and the second row shows the top three origin areas moving towards that recipient. Each column reports the results of a single regression of a 2007 (base year) origin area shares on the 2007 local area characteristics. Standard errors are clustered at the SA3 level and presented in brackets. The final column is the Bartik instrument constructed using the growth rates from 2014 to 2018, in line with Goldsmith-Pinkham et al. (2020, tab 2). When we run the regressions for different years of our instrument variable (IV), the results are also in line with the relevant column. For legibility, coefficients and standard errors are multiplied by 1000, except for the last column. ***p < 0.01, **p < 0.05, *p < 0.1.

Figure 3. Instrumental variables local projections (IV-LP) (cumulative) response of median house prices for an exogenous shock to the internal migration.

Note: Dashed lines are the 2 SE confidence interval (CI) bands.

Goldsmith-Pinkham, P., Sorkin, I., & Swift, H. (2020). Bartik instruments: What, when, why, and how. American Economic Review, 110(8), 2586–2624. https://doi.org/10.1257/aer.20181047

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